Bank Interview Question Bank 7

Forensic accountants are trained to detect evidence of frauds in financial statements. They go beyond the numbers and attempt to analyze 100% of the data as against the sampling procedure adopted by auditors. When the extended procedures are invoked, cases like the overvaluation of the sales or the debtors become easy to investigate. In India there is an urgent
need of large number of forensic accountants in view of the preponderance of corporate frauds.

Financial inclusion means providing to the large unbanked population of India access to financial products and services like:
Bank accounts, immediate credit, savings products, remittance and payment services, insurance, mortgage, entrepreneurial credit, financial advisory services.
Steps taken so far for promotion of financial inclusion have been – the cooperative movement, setting up of State Bank of India, nationalization of banks, lead bank scheme, regional rural banks, service area approach, self help groups.
Out of 611 districts in the country, only 68 districts have been covered by so called financial inclusion (as of July 2009).

CRAR is the acronym for capital to risk weighted assets ratio, a standard metric to measure balance sheet strength of banks.
BASEL I and BASEL II are global capital adequacy rules that prescribe a minimum amount of capital a bank has to hold given the size of its risk weighted assets. The old rules mandate banks to back every Rs 100 of commercial loans with Rs 9 of capital irrespective of the nature of these loans. The new rules suggest the amount of capital needed depends on the credit
rating of the customer.

BCSBI is an independent and autonomous body set up by RBI to ensure that comprehensive code of conduct for fair treatment of customers was evolved and adhered to. In substance the board has been set up to ensure that the common consumer of banking services is in no way in a disadvantageous position and really gets what he has been promised by the banks.

Member banks of the board have voluntarily agreed to abide by the provisions enumerated in the codes which have been drawn up for the benefit of customers. These are:
Code of Bank’s Commitment to Customers, and
Code of Bank’s Commitment to Micro and Small Enterprises.

An independent dispute resolution authority provided by RBI to deal with disputes that bank customers have with their respective banks. The authority is to be approached after the customer fails to get his grievance resolved from the concerned bank in terms of the grievance redressal mechanism.

Nomination in bank accounts prevents harassment and facilitates the bank to make payment to the nominee of a deceased depositor, of the amount standing to the credit of the depositor without the need for producing succession certificate and completion of other legal formalities as required to determine the legal heirs.

It is supposed to be a basic savings bank account for the benefit of all sections of the population. Such accounts require either nil or low minimum balance to be maintained. Services available for these accounts are also limited.

All deposits upto Rs 1 lakh in a commercial or cooperative bank in India are insured by the Deposit Insurance and Credit Guarantee Corporation of India DICGC. The insurance protection is available free of cost to the depositors and covers the principal and interest dues taken together. Deposits in different banks are separately insured with each deposit eligible for Rs
1lakh cover. Insurance cover is available across savings accounts, current accounts, recurring and fixed deposit accounts.

It is the statistical summary of the individual bits of information on the credit report of an entity. A credit score predicts how likely it is that a company or individual will repay debts. Banks use this information to take a decision whether to sanction the loan or not and if so, the applicable rate of interest.

With the increasing use of credit, debit cards for withdrawal of cash from ATMs, the use of the term plastic money is common. These cards being of plastic facilitating availability of cash or money to the card holder, have come to be referred commonly as plastic money.

Free look period is a fortnight given to a new insurance policy holder to examine the life insurance contract that he has signed. In case he does not want to continue with it, he can rescind the contract and the insurance company shall refund the amount paid. In India IRDA has made it mandatory for all insurance companies to grant 15 days free look period. The free
look period starts from the day of receipt of policy documents by an individual and the cancellation of the policy must be intimated to the insurance company within this time period.

The riders are meant to provide additional cover against risks. Depending upon the risk perception additional covers can be brought with the basic policy. These riders may cover accidental death, critical illnesses, disability etc. Though extra premium would be charged for each of the additional risk covers it would still be much less when compared to separate policies.