Bank Interview Questions

A commercial bank is a type of financial institution that accepts deposits, offers checking account services, makes business, personal and mortgage loans, and offers basic financial products like certificates of deposit (CDs) and savings accounts to individuals and small businesses. A commercial bank is where most people do their banking, as opposed to an investment bank.

Commercial banks are funded through customer deposits. These banks make money by providing loans and earning interest income from those loans. The types of loans a commercial bank can issue vary and may include mortgages, auto loans, business loans and personal loans. A commercial bank may specialize in just one or a few types of loans.

Customers who deposit money into these accounts effectively lend money to the bank and are paid interest. However, the interest rate paid by the bank on money they borrow is less than the rate charged on money they lend.

The Accountant typically prepares the Bank Reconciliation Statement using all transactions.

Bank Reconciliation Statement :

Bank reconciliation is a process which prepares a statement accounting for the difference between the cash balance in the cash account of a company and the cash balance according to its bank statement. This statement can help a company to verify that its bank account ending balance per the bank matches the balance on hand per the company's general ledger.

The advantage of equity finance for a company – raising money by selling shares – is that this money does not have to be repaid. However, new shareholders usually get to have a say in how the company is run. Despite these rights, equity is often seen as a risky choice for investors as they will lose all their money if the company doesn’t prosper. If it does well, on the other hand, they may see their stake multiply in value many times over.

Debt finance – money raised through loans – must be repaid eventually by a company, usually with interest, but lenders won’t be able to exert as much influence as shareholders over how the company does business. The debt of a reliable company is usually seen as a safe investment, but fixed repayment schedules means that there are few opportunities for large returns.

‘Endorsing cheque’ ensures that the cheque get deposited into your account only. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier will ask you to sign at the back of the cheque. The signature should match the payee. The image over here shows the endorsed cheque.

Under state law limited exemptions from local real property taxes for individuals who qualify are senior citizens(blind and disabled persons), who may defer their taxes; Veterans, who receive $4000 off assessed value; and homeowners, who receive $7000 off assessed value.

Foreign draft is an alternative to foreign currency; it is generally used to send money to a foreign country. It can be purchased from the commercial banks, and they will charge according to their banks rules and norms. People opt for ‘foreign draft’ for sending money as this method of sending money is cheaper and safer. It also enables receiver to access the funds quicker than a cheque or cash transfer.

The primary Economic function of the Financial system is to match one person's savings with another person's investment.

* As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner.

* They provide specialized financial services, which reduce the cost of obtaining information about both savings and borrowing opportunities.

* These financial services help to make the overall economy more efficient.