SBI/IBPS PO Interview: Most expected questions, part 3

Dear Readers,
Welcome to the third part of ‘Must know questions and answers for Bank PO Interview 2017. Here are some essential questions and theirs answers to help IBPS PO aspirants sail through the IBPS PO Interview 2017.

  • What do you understand by nationalisation?

Nationalisation is a process by which a government/state takes ownership of a private industry/asset.

  • Why were banks nationalised?

a. Commercial banks operated in the private sector and were more business-friendly.
b. They lacked the resolve to serve the poor sections of the society, mainly those in the agro and agro-allied occupations.
c. Agriculture was the backbone of the Indian economy and the lack of financial empathy towards farmers and small-time entrepreneurs was deemed reckless. Banks were nationalised to enable poor sections of the society to take advantage of their services.

  • How were State Bank of India and its associate banks formed?

State Bank of India is India’s largest public sector lender. It originated as the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of the three banks funded by a presidency government; the other two were the Bank of Bombay and the Bank of Madras. The three banks were merged in 1921 to form the Imperial Bank of India, which after India’s independence came to be known as the State Bank of India in 1955. Under the State Bank of India (Subsidiary Bank) Act 1959, SBI acquired 7 associate banks earlier belonging to princely states prior to nationalisation. These were: State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, State Bank of Saurashtra, and State Bank of Indore. A proposal to merge all associate banks into SBI to create a ‘mega bank’ was mooted, under which State Bank of Saurashtra and State Bank of Indore were merged into SBI in August 2008 and June 2009 respectively.

  • What are commercial banks?

The term ‘commercial bank’ refers to both scheduled and non-scheduled banks that are regulated under the Banking Regulation Act, 1949.

  • What are scheduled banks?

The Indian banking industry is broadly classified into scheduled banks and non-scheduled banks. Scheduled banks are defined under the 2nd Schedule (2E) of the RBI Act, 1934. When the RBI confirms that a bank satisfies criteria listed in section 42 (6) (a) of the Act, it lists the bank as a scheduled bank.
For this, the bank has to satisfy two conditions:
1. It should have paid-up capital and reserves of an aggregate value of at least Rs. 5 lakhs
2. Day-to-day banking activities of the bank should not adversely impact the interests of its depositors.
Scheduled banks enjoy the following facilities:
1. They become eligible for debts/loans on the prevailing bank rate from the RBI
2. They automatically acquire clearing house membership.
Scheduled banks are further classified into:
➢ State Bank of India and its associate banks ➢ Nationalised banks ➢ Regional rural banks (RRBs) ➢ Private banks ➢

  • What are non-scheduled banks?

These are the banks that are not included in the 2nd schedule of RBI Act, 1934. They also have to maintain a statutory cash reserve, but not with the RBI. Their banking activities are also limited. For example, they cannot deal in foreign exchange. These banks are not listed on the stock exchange and their shares are not traded publicly. For example: All Co-operative banks come under non-scheduled banks. Following are some of the nonscheduled banks in India:
Akhand Anand Co-Op Bank Ltd.
Alavi Co-Op Bank Ltd.
Amarnath Co-Op Bank Ltd.
Amod Nagrik Sahakari Bank Ltd.