PERSONAL INTERVIEWS AND REQUIREMENTS:-

The most and the first thing is CONFIDENCE!

-Keep your protocol as much as possible.
-Do not open the door until you get permission to open
it(get in!) and when u enter in z room, you must have
good facial expression.
-until z interviewer allows to sit, you must have not sit.
-when they say welcome, it is better to say thank you!
rather than well stay.
-when they say have a sit, say thank you! and sit after
sitting give good eye contact to z interviewer’s & follow
sensitively who of them will start z interview.
-Have a Good dressing.

COMMON INTERVIEW QUESTIONS ABOUT BANK

-What is the difference b/n bank and banking?
-what is banking?
-what is bank service and what are the services
delivered by cbe ?
-What are the types of deposits?
-what are the values, visions and missions of CBE?
-What does it mean world class commercial bank of
Ethiopia?
-what is the objective of CBE?
-what is the major role and contribution of CBE for
individuals and for the over all country’s economy?
-what makes national bank different from commercial
bank?
-what are the major institutions for which the CBE gives
service in collaboration with the out side world?
-Why cbe expands its branches throughout out the
country?
-Why cbe bears interest to depositors , while the
deposit is the liability of the bank?

PERSONAL QUESTIONS
– introduce your self
-What is your future plan?
-what is your weakness and strength?
-if it happens some quarrel among staff members what
will you do on the conflict resolution ?
-what are your special qualities and talents?
-what is your motive for your engagement as a
candidate in CBE?
-How much salary do you expect from cbe?
-Do you have a computer skill and have you take a
computer related courses in connection with your
field’s?
COURSE RELATED QUESTIONS FOR THOSE
ACCOUNTING AND FINANCE GRADUATES:-What
are the types of financial statements? And define them.
-what is the concept of cash flow statement?
-what are the GAAP principles? and define three/ four
of them.
-What is the difference b/n withdrawal and expense?
-what is the d/ce b/n real account and nominal
account?
-What is the d/ce among financial accounting, cost
accounting and management accounting?
-What are the project evaluation techniques and define
them?
-From those project evaluation techniques which
technique is the most preferable and why?
-what are the steps of accounting cycle?
-What is depreciation?
-What are the methods of depreciation?
-Which method is known as accelerated depreciation
method?
-What is bank reconciliation and steps of bank
reconciliation?
-What items are recorded at bank side?
-What is z d/ce b/n simple interest and compound
interest?
-What is the d/ce b/n accrual and deferral?
-What is the difference b/n finance and accounting?
-what are the inventory systems and methods?
-What is the difference b/n capital expenditure and
revenue expenditure?
-Define the term partnership and corporation with their
properties?
-What is petty cash?
General interview questions
About your final BA/BSC research
-What is your research topic
-How many Research questions do you answer would
you tell me those research questions you done
-What is your research finding explain briefly
Describe your research General and specific objectives
Note that you must be aware of about all your research
paper interviewers may ask every questions about your
paper

About subject matter

Economics
-what is macro Economic policies
-What is opportunity cost
-What are macro economic problems
-What is Micro Economics
-about Market structure
Etc
Accounting
-what Bank reconciliation is mandatory question
-Debit and credit General concepts
-Cash
-Trial Balance
financial statements

Note accounting questions are also asked for

management students
management
-What is Management
-what is human resource
-The difference between manager and boss
-what is the difference between Leader and boss
-What is cost management

Note that The back ground questions are mandatory

For all subjects
Return back for other course

Banking Interview Questions & Answers

What is bank? What are the types of banks?

A bank is a financial institution licensed as a receiver of
cash deposits. There are two types of banks,
commercial banks and investment banks. In most of
the countries, banks are regulated by the national
government or central bank.

What is investment banking?

Investment banking manages portfolios of financial

assets, commodity and currency, fixed income,
corporate finance, corporate advisory services for
mergers and acquisitions, debt and equity writing etc.

What is commercial bank?

Commercial bank is owned by the group of individuals
or by a member of Federal Reserve System. The
commercial bank offer services to individuals, they are
primarily concerned with receiving deposits and lending
to business. Such bank earns money by imposing
interest on the loan borrowed by the borrower. The
money that is deposited by the customer will be used
by the bank to give business loan, auto loan,
mortgages and home repair loans.

What are the types of Commercial Banks?

a) Retail or consumer banking

It is a small to mid-sized branch that directly deals with
consumer’s transaction rather than corporate or other
banks
b) Corporate or business banking
Corporate banking deals with cash management,
underwriting, financing and issuing of stocks and bonds
c) Securities and Investment banking
Investment banking manages portfolios of financial
assets, commodity and currency, fixed income,
corporate finance, corporate advisory services for
mergers and acquisitions, debt and equity writing etc.
d) Non-traditional options

There are many non-bank entities that offer financial

services like that of the bank. The entities include credit
card companies, credit card report agencies and credit
card issuers

What is consumer bank?

Consumer bank is a new addition in the banking sector,

such bank exist only in countries like U.S.A and
Germany. This bank provides loans to their customer to
buy T.V, Car, furniture etc. and give the option of easy
payment through installment.

What are the types of accounts in banks?

a) Checking Account: You can access the account as
the saving account but, unlike saving account, you
cannot earn interest on this account. The benefit of this
account is that there is no limit for withdrawal.
b) Saving Account: You can save your money in such
account and also earn interest on it. The number of
withdrawal is limited and need to maintain the minimum
amount of balance in the account to remain active.
c) Money Market Account: This account gives benefits
of both saving and checking accounts. You can
withdraw the amount and yet you can earn higher
interest on it. This account can be opened with a
minimum balance.
d) CD (Certificate of Deposits) Account: In such
account you have to deposit your money for the fixed
period of time (5-7 years), and you will earn the interest
on it. The rate of interest is decided by the bank, and
you cannot withdraw the funds until the fixed period
expires.

What are the different ways you can operate your

accounts?
You can operate your bank accounts in different ways
like
a) Internet banking
b) Telephone or Mobile banking
c) Branch or Over the counter service
d) ATM ( Automated Teller Machine)

What are the things that you have to keep in

concern before opening the bank accounts?
Before opening a bank account, if it is a saving
account, you have to check the interest rate on the
deposit and whether the interest rate remains
consistent for the period. If you have the checking
account, then look for how many cheques are free to
use. Some banks may charge you for using paper
cheques or ordering new cheque books.

Also, check for different debit card option that is

provided on opening an account and online banking
features.

What is ‘Crossed Cheque’ ?

A crossed cheque indicates the amount should be

deposited into the payees account and cannot be
cashed by the bank over the counter. Here in the
image, number#2, you can see two cross-lines on the
left side corner of the cheque that indicates crossed
cheque.

What is overdraft protection?

Overdraft protection is a service that is provided by a

bank to their customer. For instance, if you are holding
two accounts, saving and credit account, in the same
bank. Now if one of your accounts does not have
enough cash to process the cheques, or to cover the
purchases. The bank will transfer money from one
account to another account, which does not have cash
so to prevent check return or to clear your shopping or
electricity bills.

Do bank charge for ‘overdraft protection’ service?

Yes, bank will charge on ‘overdraft protection’ services
but the charges will be applicable only when you start
using the service.

What is (APR) Annual Percentage Rate?

APR stands for Annual Percentage Rate, and it is a

charge or interest that the bank imposes on their
customers for using their services like loans, credit
cards, mortgage loan etc. The interest rate or fees
imposed is calculated annually.
What is ‘prime rate’?

Basically, ‘prime rate’ is the rate of interest that is

decided by nations (U.S.A) largest banks for their
preferred customers, having a good credit score. Much
‘variable’ interest depends on the ‘prime rates’. For
example, the ‘APR’ (Annual Percentage Rate) on a
credit card is 10% plus prime rate, and if the prime rate
is 3%, the current ‘APR’ on that credit card would be
13%.

What is ‘Fixed’ APR and ‘Variable’ APR?

‘APR’ (Annual Percentage Rate) can be ‘Fixed’ or
‘Variable’ type. In ‘Fixed APR’, the interest rate remains
same throughout the term of the loan or mortgage,
while in ‘Variable APR’ the interest rate will change
without notice, based on the other factors like ‘prime
rate’.

What are the different types of banking software

applications are available in the Industry?
There are many types of banking software applications
and few are listed below
a) Internet banking system: Internet banking allows the
customers and financial institution to conduct final
transaction using banks or financial institute website.
b) ATM banking (Automated Teller Machine): It is an
electronic banking outlet, which allows customers to
complete basic transaction.
c) Core banking system: Core banking is a service
provided by a networked bank branches. With this,
customer can withdraw money from any branch.
d) Loan management system: The database collects all
the information and keeps the track about the
customers who borrows the money.
e) Credit management system: Credit management
system is a system for handling credit accounts,
assessing risks and determining how much credit to
offer to the customer.
f) Investment management system: It is a process of
managing money, including investments, banking,
budgeting and taxes.
g) Stock market management system: The stock
market management is a system that manages
financial portfolio like securities and bonds.
h) Financial management system: Financial
management system is used to govern and keep a
record of its income, expense and assets and to keep
the accountability of its profit.

What is the ‘cost of debt’?

When any company borrows funds, from a financial

institution (bank) or other resources the interest paid on
that amount is known as ‘cost of debt’.

What is ‘balloon payment’?
The ‘balloon payment’ is the final lump sum payment
that is due. When the entire loan payment is not
amortized over the life of the loan, the remaining
balance is due as the final repayment to the lender.
Balloon payment can occur within an adjustable rate or
fixed rate mortgage.

The repayment of the loan by installment to cover

principal amount with interest is known as
‘Amortization’.

What is negative Amortization?

When repayment of the loan is less than the loans

accumulated interest, then negative Amortization
occurs. It will increase the loan amount instead of
decreasing it. It is also known as ‘deferred interest’.

What is the difference between ‘Cheque’ and

‘Demand draft’?

Both are used for the transfer of the amount between

two accounts of same banks or different bank. ‘Cheque’
is issued by an individual who holds the account in a
bank, while ‘Demand draft’ is issued by the bank on
request, and will charge you for the service. Also,
demand draft cannot be cancelled, while cheques can
be cancelled once issued.
What is debt-to-Income ratio?
The debt-to-income ratio is calculated by dividing a
loan applicant’s total debt payment by his gross
income.

What is adjustment credit?

Adjustment credit is a short-term loan made by the

Federal Reserve Bank (U.S) to the commercial bank to
maintain reserve requirements and support short term
lending, when they are short of cash.

What do you mean by ‘foreign draft’?

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.

What is ‘Loan grading’?.

The classification of loan based on various risks and

parameters like repayment risk, borrower’s credit
history etc. is known as ‘loan grading’. This system
places loan on one to six categories, based on the
stability and risk associated with the loan.
What is ‘Credit-Netting’?

A system to reduce the number of credit checks on

financial transaction is known as credit-netting. Such
agreement occurs normally between large banks and
other financial institutions. It places all the future and
current transaction into one agreement, removing the
need for credit cheques on each transaction.

What is ‘Credit Check’?

A credit check or a credit report is done by the bank on

a basis of an individual’s financial credit. It is done in
order to make sure that an individual is capable enough
of meeting the financial obligation for its business or
any other monetary transaction. The credit check is
done keeping few aspects in concern like your
liabilities, assets, income etc.

What is inter-bank deposit?

Any deposit that is held by one bank for another bank is

known as inter-bank deposit. The bank for which the
deposit is being held is referred as the correspondent
bank.

What is ILOC (Irrevocable Letter Of Credit)?

It is a letter of credit or a contractual agreement

between financial institute (Bank) and the party to
which the letter is handed. The ILOC letter cannot be
cancelled under any circumstance and, guarantees the
payment to the party. It requires the bank to pay
against the drafts meeting all the terms of ILOC. It is
valid upto the stated period of time. For example, if a
small business wanted to contract with an overseas
supplier for a specified item they would come to an
agreement on the terms of the sale like quality
standards and pricing, and ask their respective banks
to open a letter of credit for the transaction. The buyer’s
bank would forward the letter of credit to the seller’s
bank, where the payment terms would be finalized and
the shipment would be made.

What is the difference between bank guarantee and

letter of credit?
There is not much difference between bank guarantee
and letter of credit as they both take the liability of
payment. A bank guarantee contains more risk for a
bank than a letter of credit as it is protecting both
parties the purchaser and seller.

What is cashier’s cheque?

A cashier cheque issued by the bank on behalf of the

customer and takes the guarantee for the payment.
The payment is done from the bank’s own funds and
signed by the cashier. The cashier cheque is issued
when rapid settlement is necessary.
What do you mean by co-maker?

A person who signs a note to guarantee the payment of

the loan on behalf of the main loan applicant’s is known
as co-maker or co-signer.

What is home equity loan?

Home equity loan, also known as the second mortgage,

enables you to borrow money against the value of
equity in your home. For example, if the value of the
home is $1, 50,000 and you have paid $50,000. The
balance owed on your mortgage is $1, 00,000. The
amount $50,000 is an equity, which is the difference of
the actual value of the home and what you owe to the
bank. Based on equity the lender will give you a loan.
Usually, the applicant will get 85% of the loan on its
equity, considering your income and credit score. In
this case, you will get 85% of $50,000, which is
$42,500.

What is Line of credit?

Line of credit is an agreement or arrangement between

the bank and a borrower, to provide a certain amount of
loans on borrower’s demand. The borrower can
withdraw the amount at any moment of time and pay
the interest only on the amount withdrawn. For
example, if you have $5000 line of credit, you can
withdraw the full amount or any amount less than
$5000 (say $2000) and only pay the interest for the
amount withdrawn (in this case $2000).

How bank earns profit?

The bank earns profit in various ways

a) Banking value chain
b) Accepting deposit
c) Providing funds to borrowers on interest
d) Interest spread
e) Additional charges on services like checking account
maintenance, online bill payment, ATM transaction

What are payroll cards?

Payroll cards are types of smart cards issued by banks

to facilitate salary payments between employer and
employees. Through payroll card, employer can load
salary payments onto an employee’s smart card, and
employee can withdraw the salary even though he/she
doesn’t have an account in the bank.

What is the card based payments?

There are two types of card payments
a) Credit Card
b) Debit Card

What ACH stands for?

ACH stands for Automated Clearing House, which is an
electronic transfer of funds between banks or financial
institutions.

What is ‘Availability Float’?

Availability Float is a time difference between deposits

made, and the funds are actually available in the
account. It is time to process a physical cheque into
your account.
For example, you have $20,000 already in your
account and a cheque of another $10,000 dollar is
deposited in your account but your account will show
balance of $20,000 instead of $30,000 till your $10,000
dollar cheque is cleared this processing time is known
as availability float.

What do you mean by term ‘Loan Maturity’ and ‘Yield’?

The date on which the principal amount of a loan

becomes due and payable is known as ‘Loan Maturity’.
Yield is commonly referred as the dividend, interest or
return the investor receives from a security like stock or
bond, interest on fix deposit etc. For example, any
investment for $10,000 at interest rate of 4.25%, will
give you a yield of $425.

What is Cost Of Funds Index (COFI)?

COFI is an index that is used to determine interest
rates or changes in the interest rates for certain types
of Loans.

What is Convertibility Clause?

For certain loan, there is a provision for the borrower to

change the interest rate from fixed to variable and vice
versa is referred as Convertibility Clause.

What is Charge-off?

Charge off is a declaration by a lender to a borrower for

non-payment of the remaining amount, when borrower
badly falls into debt. The unpaid amount is settled as a
bad debt.

What ‘LIBOR’ stands for?

‘LIBOR’ stands for London Inter-Bank Offered Rate. As

the name suggest, it is an average interest rate offered
for U.S dollar or Euro dollar deposited between groups
of London banks. It is an international interest rate that
follows world economic condition and used as a base
rate by banks to set interest rate. LIBOR comes in 8
maturities from overnight to 12 months and in 5
different currencies. Once in a day LIBOR announces
its interest rate.

What do you mean by term ‘Usury’?

When a loan is charged with high interest rate illegally
then it is referred as ‘Usury’. Usury rates are generally
set by State Law.

What is Payday loan?

A pay-day loan is generally, a small amount and a

short-term loan available at high interest rate. A
borrower normally writes post-dated cheques to the
lender in respect to the amount they wish to borrow.

What do you mean by ‘cheque endorsing’?

‘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.

What are the different types of Loans offered by

banks?

The different types of loans offered by banks are:

a) Unsecured Personal Loan
b) Secured Personal Loan
c) Auto Loans
d) Mortgage Loans
e) Small business Loans

What are the different types of ‘Fixed Deposits’?

There are two different types of ‘Fixed Deposits’
Special Term Deposits : In this type of ‘Fixed Deposits’,
the earned interest on the deposit is added to the
principal amount and compounded quarterly. This
amount is accumulated and repaid with the principal
amount on maturity of the deposit.
Ordinary Term Deposits : In this type of ‘Fixed
Deposits’, the earned credit is credited to the investor’s
account, once in a quarter. In some cases, interest may
be credited on a monthly basis.
The earned interest on fixed deposits is non-taxable.
You can also take a loan against your fixed deposit.

What are the different types of Loans offered by

Commercial Banks?
Start-Up Loans

This type of Loan is offered to borrower to start their

business and can be used to build a storefront, to
acquire inventory or pay franchise fees to get a
business rolling.

Line of Credit

Lines of credit are another type of business loan

provided by commercial banks. It is more like a security
for your business; the bank allows the customer to
withdraw the amount from readily available funds in an
adverse time. Customer or Company can pay back
over time and withdraw money again without going into
the loan process.
Small Business Administration Loans
It is a Federal Agency (U.S) that gives funding to small
businesses and entrepreneurs. SBA (Small Business
Administration) loans are made through banks, credit
unions and other lenders who partners with SBA.

What is ‘Bill Discount’?

‘Bill Discount’ is a settlement of the bill, where your

electricity bill or gas bill is sold to a bank for early
payment at less than the face value and the bank will
recover the full amount of the bill from you before bill
due date. For example, electricity bill for XYZ is $1000;
the electricity bill company will sell the bill to the bank
for 10% to 20% discount to the face value. Here, the
bank will buy the electricity bill for $900 whose face
value is $1000, now the bank will recover, full amount
of bill from the customer i.e $1000. If the customer fails
to pay the bill, the bank will put interest on the
outstanding bill and ask the customer for the payment.

What is ‘Bill Purchase’?

In ‘Bill Purchase’ the loan will be created for the full

value of the draft and the interest will be recovered
when the actual payment comes. For example, a ‘Sight
draft’ is presented for which the loan is created for
100% of the draft value. The money is received after 7
days, and then the interest will be recovered for 7 days
along with the principal amount.
What is ‘Cheque Discount’?

Cheque discounting service is offered only by few

banks. For instance, if you have a cheque of $3000
outstation and the cheque will take 7 seven days for
clearance, then bank will offer you a service for early
payment. The bank can make an early payment, but
they will pay only for certain percentage of the actual
amount, here they will pay you $2000 but they will
charge interest on it and the remaining $1000 will be
paid, once the outstation cheques get clear