Banking offers a wide range of job possibilities for both new graduates and seasoned professionals. But passing the interview process, which includes a range of questions, is just as important as meeting the school requirements and doing well in the aptitude tests.
For an accounting job, you might not need experience, but you do need to do well in the interview.
There are many job opportunities in finance and banking for college graduates from different fields. These include corporate banking, customer relationship management, research, tax analysis, and expert roles.
Read this post to see the best banking interview questions and how to answer them. It will help you ace the interview.
Table of contents
- 30 Frequently Asked Bank Interview Questions In Nigeria
- Please tell me a little about yourself
- What drives you to work in banking?
- What kind of accounts are offered in banks?
- What documents are needed to open a bank account?
- What are the types of Commercial banks ?
- What is Annual percentage rate (APR)?
- What is amortization and negative amortization?
- What is the debt-to-income ratio?
- Explain loan grading?
- What exactly does the word “co-maker” mean?
- What is line of credit?
- What is the way in which banks generate profit?
- What are the software banking applications available in the industry?
- What is payroll card?
- Describe several card-based payment methods.
- What exactly is the meaning of a payday loan?
- What is a charge off?
- What types of loans do commercial banks offer?
- What types of fixed deposits are there?
- What is a home equity loan?
- Explain Amortization
- What is an interbank deposit?
- What does “non-performing asset” mean?
- When a consumer asks for a loan, what are some red signs that suggest they may not be a reliable borrower?
- How can you help a client who is having trouble understanding the financial statement you are describing to them?
- What is the central bank’s role in the economy, and how do its policies affect commercial banks?
- In the context of lending to people and businesses, how do you assess and manage credit risk? Provide an example from your work experience.
- Discuss the importance of regulatory compliance in the banking business, and describe how you stay up to date on changes to banking rules and ensure compliance in your job.
- Give an example of when you had to settle a client complaint while adhering to the bank’s policies and prioritizing customer happiness.
- How do you see technology influencing banks in the next digital era? Could you provide some instances of cutting-edge technology that you think will have a major impact on the sector, as well as how your position might evolve to accommodate these developments?
- Basic Interview Tips
This is the first question that every interviewer asks in order to start a conversation and learn more about the applicant.
To avoid this, always have a good mood and start your introduction by telling the interviewer your name, your qualifications, and anything else they should know.
Give the answer within the allocated two minutes to avoid turning it into a lengthy conversation.
Give a rational solution to this question by stating the reasons why the banking business has had an effect on society, backed up by facts, and explaining why it is the fastest growing industry.
Do not tell them right away that you want a steady job or a specific stance. Simply guarantee that it is well-versed.
There are different types of bank accounts:
Checking Account: This form of account is comparable to a savings account, however it does not allow interest profits. The benefit of starting a bank checking account is that withdrawals are not limited.
Money Market Account: This type of account combines the perks of both checking and savings accounts. Even if you remove the money, the interest rate will stay higher. A minimal amount can be made for this type of account.
Certificate of Deposit Account (CD): You can open a CD account and earn interest by depositing funds for a set length of time, such as five or seven years. You cannot withdraw the funds until the designated time period has elapsed, and the bank will create the interest rate.
Savings accounts: This allows you to save money while getting interest. There is a withdrawal limit, and the account must have a minimum balance to be active.
Banks follow the Know Your Customer (KYC) standards when collecting personal account information.
The main documents necessary to open an account are identification and proof of address.
Commercial banks are split into the following categories:
Retail banks, sometimes known as consuming banks, are small to medium-sized branches that handle customer transfers directly, unlike corporate or other banks.
Business banking, often known as corporate banking, focuses on cash management, bond and stock issuing, underwriting, and financing.
Non-traditional Options: Many non-banking organizations offer banking-like financial services. The services include credit card issuers, credit card companies, and credit card reporting agencies.
Securities and Investment Banking: Investment banking handles financial asset portfolios such as debt and equity writing, corporate finance, fixed income, commodities, and currency.
APR stands for annual percentage rate.
This is the annual percentage rate (APR) that the bank charges its users for using its services, which include credit cards and loans.
Amortization is the repayment of a loan in installments sufficient to cover the principal amount plus interest.
In contrast, negative amortization happens when loan repayment is less than interest accumulated,
To determine the debt-to-income ratio, divide the entire amount of debt a loan applicant must pay off by their gross income.
Loan grading is the process of classifying a loan based on many features and risks, such as the likelihood of repayment, the borrower’s credit past and so on.
The method categorizes loans into six groups based on their risk and stability.
A co-maker or signer is someone who signs a note guaranteeing the loan’s repayment on behalf of the main borrower.
A line of credit is an arrangement between a bank and a borrower to give a set amount of loans at the borrower’s request.
The borrower just needs to pay interest on the amount withdrawn, which they can take out at any time.
What is the way in which banks generate profit?
The bank makes money in a number of ways.
- Taking a deposit
- Value Chain in Banking
- Lending money to creditors at interest
- Additional charges for services such as online bill payment and account upkeep checks.
The eight most popular financial softwares are below:.
- Internet banking system
- ATM banking
- Core banking system
- Loan management system
- Credit management system
- Investment management system
- Stock-market management system
- Financial management system
Banks have launched a range of smart cards known as payroll cards to help companies and employees pay salaries.
An employee’s smart card can be loaded with salary payments by their company using a payroll card, allowing them to access their money even without a bank account.
Card payments fall into two categories:
- Payment using a credit card
- Payment using a debit card
A payday loan is a small-dollar, short-term loan with a high interest rate.
When a borrower is heavily in debt, the lender will state that they are unable to pay the outstanding balance. This is known as a charge-off.
The outstanding balance is handled as bad debt.
The answer is that lenders provide loans to customers. Let us review the many lending possibilities offered on the market.
- 1. Individual Loans
- 2. Loans With Credit Cards
- 3. House loans
- 4. Automobile Loans
- 5. Loans for Two-wheelers
- 6. Loans For Small Businesses
- 7. Short-term loans
- 8. Cash Advances
- 9. Loan for home repair.
- 10. Loan for agriculture
- 11. Gold Credit
- 12. Credit Card Debt Refinance
- 13. Loan for Education
- 14. Durable consumer things.
What types of fixed deposits are there?
Before making an investment, you should understand the different types of fixed deposits in order to maximize your returns.
- Standard Bank Fixed Deposits
- Corporate Fixed Deposits
- Tax-Saving Fixed Deposits
- Senior Citizen Fixed Deposits
- Cumulative Fixed Deposits
- Non-cumulative Fixed Deposits
- Flexi Fixed Deposits
- NRI Fixed Deposits
The answer is that home equity loans allow you to borrow at a fixed interest rate by using a part of your completely owned home as collateral.
Amortization is the process of repaying a loan in installments to cover the principal amount plus interest.
Interbank deposits are mutual arrangements between two banks in which one bank keeps funds in an account on behalf of another institution.
To enable this arrangement, the holding bank sets up a due-to account for the other bank.
A non-performing asset (NPA) is a loan or advance that has not received timely principal or interest payments for at least 90 days.
When a consumer asks for a loan, what are some red signs that suggest they may not be a reliable borrower?
If the banking position you are applying for requires you to make loan choices, you must show your ability to make sound decisions while evaluating candidates.
Lending money to untrustworthy clients results in defaults, which can be bad for the bank financially.
You should list the primary warning signs that a client is a high-risk borrower and explain how you would react in that situation.
“It is important to make sure that any loans I approve are responsible, as it is good both for us as a bank and for the borrower.
In addition to checking the applicant’s payment history for late payments or defaulted loans, I will also check their credit card utilization and debt-to-income ratios.
High utilization is a sign that the applicant may be over-leveraged and in danger of defaulting. For high-risk applicants, I will opt for loan options that are safer for the bank and decline the loan request if a suitable offer is not available.”
How can you help a client who is having trouble understanding the financial statement you are describing to them?
You need to use simpler language to explain financial rules and regulations offers to customers who are unfamiliar with them.
The ability to translate financial jargon into simple terms is important for banking professionals.
Use this question to demonstrate your conviction that relatable language is essential while interacting with customers.
Sample response: “Whenever I am working with a customer, I always explain things as simply as possible unless I know they have a higher level of financial literacy. When this method is still not enough and it becomes clear that the customer is not understanding, I will try to find a new way to make it more relatable to them. I try to get to know customers when they come in and get service at the desk so that I have more to base talks like this on when needed.”
Discuss the central bank’s monetary policy, currency issuance, and financial system control actions. Discuss the effects of central bank decisions on liquidity and interest rates.
Demonstrate an understanding of the overall economic environment, including how central bank policies and commercial banking operations interact.
“Central banks contribute significantly to the economy by managing the money supply, monetary policy, and financial stability.
Changes in central bank interest rates, for example, affect the cost of borrowing for commercial banks, influencing lending and spending habits.
Central banks also supervise the overall health of the financial system. To successfully navigate economic upheavals, a commercial bank must have a deep understanding of these dynamics.”
In the context of lending to people and businesses, how do you assess and manage credit risk? Provide an example from your work experience.
Give a specific example from your previous experience and explain your approach for assessing credit risk, taking into account financial studies, industry trends, and risk mitigation strategies.
Emphasize your analytical skills, meticulousness, and ability to make sound lending choices while controlling and mitigating any risks.
“When assessing credit risk, I employ a comprehensive technique that involves financial statement analysis, industry research, and a thorough understanding of the borrower’s business.
For example, in my previous job, I successfully controlled credit risk by implementing stringent underwriting procedures.
One example was when I collaborated with the client to develop a one-of-a-kind risk mitigation strategy after identifying potential issues in the borrower’s financial records, ensuring a successful loan conclusion.”
Discuss the importance of regulatory compliance in the banking business, and describe how you stay up to date on changes to banking rules and ensure compliance in your job.
Provide an example of adopting compliance procedures, stress the importance of adhering to banking rules, include any relevant training or certifications, and discuss how you keep up with regulatory changes.
Demonstrate a strong commitment to following regulations, knowledge of industry norms, and the ability to ensure the bank works within morally and legally acceptable bounds.
In my previous position, I created a strong compliance structure through frequent training sessions and audits, which fostered a compliance culture within the team while also ensuring regulatory compliance.
I stay up-to-date by attending business seminars, obtaining certifications, and furthering my education.
Give an example of when you had to settle a client complaint while adhering to the bank’s policies and prioritizing customer happiness.
Give an example of how you swiftly and skillfully resolved a client issue, showing your ability to communicate, solve problems, and be customer-focused.
Emphasize your empathy, customer-centricity, and the steps you take to resolve problems while adhering to the bank’s standards and processes.
“The satisfaction of our customers comes first. A recent instance had a client expressing discontent with a service. I looked into the matter right away, was open and honest with the client, and took quick corrective action. It was crucial to respond to the customer’s problem as soon as possible, make sure they felt heard, and take action to stop it from happening again.
This strategy improved the customer’s faith in our services and led to a successful settlement.”
How do you see technology influencing banks in the next digital era? Could you provide some instances of cutting-edge technology that you think will have a major impact on the sector, as well as how your position might evolve to accommodate these developments?
Discuss how technology is altering the banking business, using examples such as blockchain, AI, and mobile banking.
Describe how you stay up-to-date on these developments and react to market changes.
Showcase your awareness of the banking industry’s fast-evolving technological environment, as well as your ability to adopt and apply technology to boost customer happiness and operational effectiveness.
I pushed for the integration of a chatbot system in customer help to streamline query resolution. Acceptance of these advancements is critical if you want to boost output and provide
Now that you’ve read all about bank interview questions, here are some general tips to help you prepare better.
Asking questions regarding your job description and workplace provides clarity while also showing the interviewer’s curiosity and interest.
Talking points could include the bank’s current situation, future plans, the significance of the job you are interviewing for, the bank’s vision for the coming years, and so on.
Arriving at the interview place early helps you to assess the situation and become acquainted with your surroundings.
The first perception is usually the last.
Formal clothing should be well-ironed and clean for the interview. It will not only improve your look, but it will also boost your confidence.
Banking professionals are intelligent individuals who are needed to interact with people from many walks of life.
Maintain appropriate body language to show confidence, devotion, and intellect.
So, these are the questions and answers that will help you pass the interview and gain a job in the banking field.
You can also use Google to search for additional queries that may be of help.
We hope you found value.
- Shine -bank interview questions and answers
- Navigos search -bank interview questions and answers
- Career Guru -bank interview questions and answers
- 10 Frequently Asked School Prefect Interview Questions And Answers
- 20 Frequently Asked Caregiver Interview Questions And Answers
- 20 Frequently Asked Access Bank Interview Questions
- 30 Frequently Asked Interview Questions for Digital Marketing
- 30 Frequently Asked Sales Executive Interview Questions In Nigeria