FEW IMPORTANT QUESTIONS ASKED IN THE INTERVIEW:

FEW IMPORTANT QUESTIONS ASKED IN THE INTERVIEW:
1. Tell me about yourself.
This is a common question—and sometimes the hardest. It's a broad, general question, and the worst thing you can do is give a
broad, general answer.
So how do you make the most of this question? Use it as a springboard to introduce the topics you want to discuss. Decide in
advance what you want the interviewer to know: Your favorite job experience, your most valuable activities in college, your goals
and dreams. Focus your answer by picking one or two things and then use specific details to bring the topic alive.
Example:
I'm a hard worker and I think I generally have good organizational skills. In college, I led a team of designers to create the Web
site for each of the University's volunteer organizations...
2. i) Why Should We Hire You?
Summarize your experiences: "With five years' experience working in the financial industry and my proven record of saving the
company money, I could make a big difference in your company. I'm confident I would be a great addition to your team."
ii) Why should we hire you?
Stress your knowledge, work experience, skills, and abilities. Always highlight specifics, not generalities. Anyone can make a bold
statement, but what sells you is when you can back it up with proven experience.
3. What are your major weaknesses?
 "I used to have a tendency to procrastinate. So now I am always sure to set a strict schedule for all of my projects well in
advance and I set personal deadlines. This organization has really helped."
 I tend to be a perfectionist.
 I sometimes work too hard, leading to unnecessary stress.
 I am always working on improving my communication skills to be a more effective presenter.
4. What is your greatest Strength?
Just be positive.
Try Our Tip.
You should highlight your communication skill, problem solving skills, your ability to work better under pressure, your ability to
focus on projects and your leadership skills.
5. Why did you leave your last job?
 If You Quit: Again, be honest and stay positive. State that the work being offered wasn't challenging enough, that you are
seeking higher levels of responsibility or simply that you are ready to make the next step on your career ladder -- and that the job
for which you are interviewing is the ideal next step.
6. Do you have any questions for us? Or do you want to ask any question?
I'm very interested in this job. It's exactly the kind of job that I'm looking for. What is the next step in the interview process?
7. What prompted your decision to apply for this position? Or Why do you want to join a Bank?
The question behind this question may be:
 Do you know what motivates you?
 How much do you really want this job?
 Do you really understand what it takes to be successful in this job?
 Why us? How do you know you would be happy in our organization?
Suggestions:
If you apply for positions that match your true needs, this should be an easy question. Link your interest and enthusiasm to the
skills and knowledge that are most relevant for the position. Mention what you like about the organization and the people who
work there.
8. Where do you see yourself five years from now?
Suggestions:
Focus on tackling the challenges within the job to which you are applying. For the longer term, you can underline how you wish to
develop your career by developing new skills and knowledge that are meaningful both to you and to the organization.
9. Do you believe in teamwork?
You should always say YES. You should have some examples ready to deliver. It should seem that you are a good performer in
team rather than solo. Always remember that you should not brag, just say it in a natural tone.
Wait patiently for this question and answer cleverly.
Try Our Tip.
You should highlight the best points that relate to your position of job. Never highlight things, which you can't do.
10. Do you rate MONEY or WORK more important?
MONEY is always important but WORK is most important.
11. Describe your work ethic?
Try to give benefits of the organization
Try Our Tip.
Always try to show that you are determined to get the job done and enjoy hard work
12. Why Do You Want to join this organisation?
The interviewer is listening for an answer that indicates you've given this some thought and are not sending out resumes just
because there is an opening. For example, "I've selected key companies whose mission statements are in line with my values,
where I know I could be excited about what the company does, and this company is very high on my list of desirable choices."
13. What Can You Do for Us That Other Candidates Can't?
What makes you unique? This will take an assessment of your experiences, skills and traits. Summarize concisely: "I have a unique
combination of strong technical skills, and the ability to build strong customer relationships. This allows me to use my knowledge
and break down information to be more user-friendly."
14. How long will you stay with the company?
Short, direct comments that express that you want to stay on board as long as you are contributing successfully to the company
and growing as a professional are sufficient. There is no need to discuss how many years you have left on station.
W hat are your strengths and weakness?

Suppose you could choose any particular post in the new scale/ grade, what would it Be and why?
W hat does success means to you and how do you measure it?
What motivates you?
Narrate any two strengths/weaknesses of yours. Have you done anything?
In the last one year to improve yourself? If yes, what?
What has been your greatest achievement in the Bank/in your personal life ?
And your biggest disappointment?
Say something about your best and worst bosses.
What qualities do you value most in those who report directly to you?
Why you should be promoted?
In your view, what were your shortcomings in the earlier tests/ interviews?
What are your hobbies?
W ho is the editor of newspaper your read?
In our Bank, what impressed you much?
How do you handle stress?
Is there anything else you would like to tell us about yourself?
In addition to these general questions, you may face certain questions
About your previous assignments. Some of these questions can include the following
W hat do you like and dislike most about your current assignment?
Do you work independently in your current assignment or a part of a team?
Do you prefer working independently or as part of a team?
W hat are some of the problems you encountered in your earlier Assignments and how did you solve them?
To understand your future ambitions and the reasons for seeking Promotions, the board may ask questions like:
Why do you want to work in the new grade /scale
W hat kind of experience do you think this assignment will provide that Your earlier assignment did not provide?
How do you feel about working late in the evenings ? And working During the weekends
What do you see as your future in the Bank?
Are you considering premature retirement at this point? Why?
How does this job compare with your earlier job?
How can you contribute more to our Bank?
How do you feel about transfer to other Module / Circle?
There is no correct answer as such. What you need to do is to answer this question calmly. Even during the real interview, you
should think before answering the questions. You need to pause before answering as it will help you put together all the points,
substantiating your response. Though you should not gloss over your weaknesses, you need to focus on your success and your
achievements /strengths. You need to convince the interviewer that you are the correct person for the higher position.
SOME MORE TIPS
 Take Full advantage of Your Speech & Body language
 Project Positive Attitude & avoid the Display of aggression
 Must understand your Strength
 Cover your weakness
 Focus on Your Professional achievement rather than Performance
 Do Self Evaluation as to how do you deserve this promotion
 Structure your reactions for adverse situations
 Hypothetical Questions should be handled by reflecting Positive attitude
 Your hobbof the interesties are the reflection of your overall Personality
 All questions are Important
 Avoid half attempted Responses
 Listen Carefully & not to be in a hurry to answer
 Be Concise & take care of the Interest of the Members on Board
 Practice Before the Interview
 Make the experience of Interview Memorable.
BAD BODY LANGUAGE FOR INTERVIEW
TOP 10 BODY LANGUAGE MISTAKES THAT WILL TURN POTENTIAL EMPLOYERS OFF
 Failure to make eye contact
 Weak handshake
 Failure to smile
 Crossing arms over chest
 Playing with something on the table
 Playing with hair or touching the face
 Fidgeting toomuch
 Bad posture
 Using too many hand gestures
 A handshake that is too strong
 You can manage nerves by giving yourself plenty of time to get to the interview, avoiding caffeine and
by taking deep breaths. But, what will help you impress INTERVIEWER?

Having a good sense of humour
 Being well dressed
 Being involved in your local community
 Being up to date with current affairs and pop culture
 Being physically fit
 Being up to speed with social media
Final Shots at Interview
FACING INTERVIEW SUCCESSFULLY?
Interview is an opportunity for you to present your personality consisting of his attitude, views and awareness level before the
interview board, so that your potential is easily judged by the members on the Interview Board.
What is evaluated during the interview?
The interview board, in order to judge your POTENTIAL evaluate your Performance in the recent past, Operating style, Team
building capabilities, Effectiveness, Neutral judgment level, Transparency in dealings, Initiatives, Attitude and Leadership qualities.
Though the interview is not a new process for us, being already in job, we have no way of knowing exactly what is going to be
asked and how that would be tackled. The following general tips can help in appearing for an interview, and face the questions
confidently.
Should we prepare pre-scripted questions?
It is important that we must not venture to go for an interview with a pre-determined script of exactly what we are going to say.
What is actually required, is the tactics that enable us to navigate successfully through the interview. Accordingly, we can adhere to
following strategy.
What we should prepare?
We should spend good time to make the choice of the relevant contents. Broadly these can be disintegrated into macro and micro
aspects.
At Macro level we should have an understanding of:
 Important happening(economic and political) taking place globally and their bearing on the performance of our
organization.
 Status of Indian economy and its impact on the banking system in India in terms of growth of business ,quality of assets
and profits.
 Vision and Mission of the bank and its strengths and weaknesses(in terms of quality of manpower, geographical spread,
level of use of information technology, introduction of new customer oriented products, pricing in terms of interest rates
offered and the effectiveness in terms of delivery), our market share , the challenges, our banking industry is facing and
the priorities laid down by the top management of our bank.
At Micro level we should have appropriate information about;
 Professional achievements during the recent 3-4 years
 Strength of family background(including dislocation on promotion, problems of growing children, serving wife, old parents)
and educational and professional background.
 Some information about the subjects studied in the last academic examination
 All important happening around work place(frauds ,shift of big accounts from the bank etc)
 Hobbies, leisure time activities
 Important development reported in the Newspaper of recent weeks.
Take full advantage of speech and body language
We should bear in mind that the employer or the members of the interview board want to know and interview is the medium for
interaction. Hence, we should express ourselves freely as expressions would flow through speech, gestures and body language.
Please remember that we would normally not get a 2nd chance, to improve our 1st impression.
Project the positive attitude and avoid display of aggression
In the interview, our attitude, the confidence with which we communicate and the depth we have about what we know, is
generally given importance. Hence, care should be taken for not reflecting negative frame of mind or negative attitude or shallow
knowledge or aggressive postures.
Must understand our strengths
Before going for an interview, you should draw a list of all your strengths. Your strengths should be projected whether opportunity
arises without making any one feel that it is self-appreciation. You should also have clarity as to , in what way your strengths alone
that you can support for the promotion.
Cover the weakness
We should also understand one weakness and prepare ourselves to cover our weak points, particularly what steps have been
initiated by you in the past to negate the impact of weaknesses. If asked to explain weakness, we should choose a weakness that
is not critical to the success on the job or assignment. The weakness, should preferably relate to the knowledge content in few
areas as opposed to the lack of personal effectiveness. For instance, a weakness relating to lack of knowledge of a particular skill,
say foreign exchange, is preferable to stating that one finds it difficult to manage people. Further, the weakness to be discussed
should be the one which the members of the Interview Board are either already aware of or will discover through the interview
process. While discussing the weakness, one should always concentrate on as to how we have been working on the problem, to
find a solution. We must try to give a tangible account of the efforts we have been making, to convert the weakness into a
strength.
Focus on professional achievement rather than personal performance
In the interviews ”Tell us about yourself” is a generally inquired question which requires much more preparation than other
questions of factual nature, since a candidate is generally not very certain, “from where to begin and how to complete.” However,
if a candidate structures the fats relating to himself carefully in advance, covering the highlights of one’s current assignment , the
past professional experience in brief and also the value we offer to the organization, we can be comfortable with the Interview
Board. It should be taken care that we focus on professional achievements rather than personal performance.

Do self evaluation as to how we, deserve this promotion
“Why do you deserve this promotion” is a frequently asked question and is required to be handled carefully. To answer this
question well, one should be aware of the requirement of Organistaion and should have clarity about what we can offer to satisfy
such requirement. The answer , should reflect the distinction which we have, compared to others, based on which we deserve the
promotion. Putting answers such as having a good job knowledge or being a hard worker, really does not help as everyone else
would claim so, under such circumstances.
Structure the reaction for adverse situation
On a no. of occasions, the candidates are asked about adverse happening in the work place where he has been working till
recently.In such circumstances, one should reflect a positive attitude, be tactful, and diplomatic in the way one describe the
situation. It is desirable that the problem is first defined to make sure that there was a breach of some system of some human
failure.It may be concluded by stating as to what lesson did one learn from the incident?
Hypothetical questions should be handled by reflecting positive attitude
At times a hypothetical situations is given to working out a strategy. For instance, if the candidate is asked as to how he would
increase the profits of a Zone/Branch , he should not start directly with the strategy. Instead, should first talk about the SWOT
analysis with a view to understand the potential available to make a strategy work.The strategy should be based on the potential
available in a particular position.
Hobbies are the reflection of overall personality
We should also be very specific about hobbies, extra curricular activities and other activities and also as to how and why we
pursue those hobbies or activities. How do we spend spare time and how do we manage the time .Additionally, we must be able to
give proper account and thorough understanding of recent assignment and your academic background.
All questions are important
In an interview, all the questions are important and no question is less difficult than the other .Even, simple question, like which
newspaper we read and which TV channel we watch and what is interesting about that could be important to understand
commitment and interests. Hence, only few questions should not be singled out as the toughest or desirable or expected.It is the
working of a question being asked, which makes one question uncomfortable from the other.We should focus not on the actual
wording of the question but on the spirit and context also. Effort should be made that the wording of a question is interpreted to
one’s advantage.
Avoid half-attempted responses
Before answering a question, for a while, one should collect thoughts, so that are able to answer appropriately as blurred or casual
or half-attempted response cannot help.
Listen carefully and do not be in a hurry to answer
Please listen very carefully, to what is being asked. One should not be in a hurry to answer the question. Be patient,stay fresh,
enthusiastic and cooperative. One should not be evasive or hesitant answering the question. Even if a question makes
uncomfortable, make earnest effort to answer it. Please endeavor to answer all question as not answering amounts to loss of
opportunity. However, if one does not have clarity, please humbly express inability to answer so that process of interview
continues.
Be concise and take care of the interest of the members on the Board
Be concise,being careful that the point mentioned is not incoherent or boring not lose the interest of the members of the interview
board and give an impression that one cannot organise his thoughts.
Practice before the interview
Before appearing for an interview, practice interview by involving your family members or colleagues. Seeking guidance from
experienced persons or Institutes can certainly bring much improvement.
What if tough questions are asked or one is not able to answer a question?
Inspite of best of the practice and preparation, very often one may be asked questions which he considers tough and unable to
answer.Donot try to give vague answers to such questions.It is better to let the interview Board know so that another question is
asked which is one more opportunity for you to cover your position.
Outside the Interview room
It is pertinent to add that one should avoid anxiety or doing something which one does not do on normal days. Handling an
interview is both an art and science and each interview differs from the other, depending upon the members in the interview
board, the time available with the Board members, the no.of candidates and the vacancies. One has to look into these aspects and
prepare himself, to be successful.
Make the experience of interview members memorable
Please remember, it is the candidate only, who can make this experience memorable and rewarding for himself and his
organisation.

INTERVIEWTIPS & TECHNIQUES

INTERVIEWTIPS & TECHNIQUES
Purpose behind conducting the Interviews.
The interview is an occasion of interpersonal communication between the prospective employer and a prospective candidate. It is a
platform where the organization checks the suitability of the candidate vis-a-vis the job profile. Moreover, the interviewee has the
opportunity to examine if his/her personal objectives will be met in the job and the company.
In an interview, the candidate try to sell themselves to the interviewer.
What Is It That The Interviewers Check In A Candidate?
Whether the candidate has developed and communicated a clear, simple, customer/ user focused vision?
Whether the candidate has futuristic outlook, and the potential to be an asset to the organisation?
Whether the candidate can inspire and energize others and make them commit to a vision?
Whether the candidate is willing to make commitments and assume responsibility for the mistakes and shortcomings?
Does the candidate practice ethical conduct?
Is there any credibility between his/her actions/ behavior with his/her words?
Does the candidate take accountability and make commitment to achieve business objectives?
Does the candidate have the ability to demonstrate courage/ confidence to stand up for beliefs and ideas to co-workers and
seniors?
Does the candidate communicate in open, candid, clear, complete and consistent manner?
Does the candidate trust others, encourage risk-taking and boundary less behavior?
Is the candidate capable of taking leadership and running a branch in the future?
How well does the candidate behave under pressure?
In a nutshell, the interviewer checks:
Your technical competence to handle the job
Your knowledge about the subject you have studied in graduation or post graduation
Your personality characteristics
Your emotional intelligence
Your general awareness and view point about the happenings around you
Your limitation in skills
Your personality trait
Your IQ (intelligence quotient), PQ (physical quotient), EQ (emotional quotient), SQ (spiritual quotient)
Your ability to analyze and articulate
Your ability to visualize the future
Your linguistic prowess
How To Face Bank Interviews : Interview is an opportunity for you to present your personality consisting of your attitude,
views and awareness level before the Interview Board, so that the potential in `you' is appropriately judged by the members on the
Interview Board, who are learned people in their own fields of specialisation.
What you should prepare ?
You should spend good time to make the choice of the contents relevant to your interview. These contents differ for interviews
depending upon the level for which the interview is being held. Broadly these can be disintegrated into macro and micro aspects.
What is evaluated during the interview ?
The interview board, in order to judge your POTENTIAL evaluates your Performance in the recent past, Operating style, Team
building capabilities, Effectiveness, Neutral judgment level, Transparency in dealings, Initiatives, Attitude and Leadership qualities.
Though the interview is not a new process for many of you, being already in job, but you have no way of knowing exactly what is
going to be asked and how that would be tackled. The following general tips can help a candidate appearing for an interview, to
face the questions confidently.
Should you prepare pre-scripted questions?
It is important that you must not venture to go for an interview with a predetermined script of exactly what you are going to say.
What is actually required, is the tactics that enable you to navigate successfully through the interview. This author had the
opportunity of being both, the interviewee and interviewer on several occasions during his banking career.
Preparing yourself as the interviewer
There are a number of aspects of critical importance in planning the interview:
Timing - enough time must be allowed for the interviews and making notes between each. Each candidate should be given the same
length of time in the interview. There should be sufficient breaks built into the interview programme.
Re-read the application form or CV, job description and person specification to identify areas which need further exploration or
clarification. The appointment panel should agree the format of the interview and identify questions to cover the key competencies
required by the post. The different subject areas should be allocated between the panel members in advance of the interview date.
The panel should agree how they will operate as a team during the interviews. The first interview of the day should not be used as
'a dress rehearsal' - otherwise the appointment panel could be accused of acting unfairly.
The venue of the interview should be of an appropriate size and one which encourages the interviewee's concentration. It should
be comfortable for both interviewers and the candidate (seating, heating, lighting, ventilation, noise level) and be well sign-posted
with a waiting area containing literature about the organisation. There should be no interruptions and mobile phones should be
switched off. Reasonable adjustments must be made to the facilities as necessary where a candidate has requested this because of
a disability.
The reception arrangements for candidates should be welcoming and the receptionist briefed.

The seating arrangement should be as inclusive as possible so that the candidate does not feel isolated.
Preparing the candidate
Prior to the interview the candidate should have sufficient information about the post, the requirements of the post and the
organisation. Candidates should be given adequate notice of the interview date, panel composition and designation and, ideally, be
given a brief tour of the place of work prior to the interview. Candidates are asked to produce documentary evidence of their
qualifications which are stipulated in the person specification.
At the start of the interview, the candidate can be helped by:
the Convener introducing the panel and having name cards placed in front of the members;
the panel putting the candidate at ease;
the Convener explaining the structure and length of the interview;
being informed that notes will be taken to ensure a fair assessment to be made;
being asked whether they have any queries after the introduction;
the use of an opening non-discriminatory 'warm-up'question.
Structure :
Working to a structure is a major step towards improving the quality of interviewing, as it helps to:
ensure that nothing significant has been missed;
keep track of how the interview time is being used;
give candidates a sense of progress through the interview;
help ensure consistency between candidates.
Questions must be planned in advance. It is usual to have a series of questions that are posed to every candidate with specific ones
for individual applications based on information in their application forms. The need to raise additional questions will arise in order to
probe candidates responses and these should be asked at the appropriate time. No question should be asked of a discriminatory
nature e.g. asking a female candidate about her childcare arrangements.
The interview should be structured as follows:
the Opening - this will include introductions, advising candidates of the structure which will be followed and that note-taking will
occur. A few moments of small talk will help to relax the candidate and establish rapport.
the Body - this is the main part of the interview where the required evidence about the candidate's suitability for the post against
the key criteria is obtained.
the Close - Candidates should always be given the opportunity and sufficient time to ask any questions they may have. They should
be informed of the timescales and methods of notifying them of the outcome and should be thanked for attending the interview.
The Disability Discrimination Act 1995 does not prevent you asking questions about a candidate's disability but this information
must not be used to discriminate. When asking a candidate how their disability may affect their ability to do the job it is important
to focus on competencies required by the post, place these questions in the latter part of the body of the interview, and indicate
where possible a willingness to make those reasonable adjustments which would enable the job to be performed.
Questioning techniques : You should aim to have the candidate talk about 70-80% of the time, as the key aim of the interview
is to obtain evidence from the candidate. Effective interviews depend on well-thought out and well-structured questions.
There are various types of questions:
Open - these questions enable candidates to provide facts and information, describe things, express feelings or opinions
etc. They encourage candidates to start talking. They typically start with the words 'what, why, how?'
Example - 'Tell me about the most challenging project you have completed in the last year'.
Closed - the number of possible answers is limited and are usually either 'yes' or 'no'. They are useful to check facts, or
your understanding of answers or to close the interview.
Example - 'Did you have responsibility for a team in your last job?'
Multiple - these occur when two or more questions are asked at one time. Candidates will normally only answer one of
them - the one they find easiest or heard last. These types of questions should not be used in interviews.
Example - 'Why have you applied for this job, and why do you want to leave your present job?'
Leading - the answer which is expected is suggested in the question, and thus are not appropriate for selection interviewing.
Example - 'We need someone who has good planning skills. How well do you plan ahead?'
Hypothetical - is where the interviewer describes a situation to the candidate and asks him/her how he/she would respond. Too
many of this type should be avoided as the reply might be completely different from what the candidate would actually do, and you
have no way of evaluating the answer consistently.
Example -' What would you do if two members of your team had a fierce argument in the office?'
Behavioural - are useful questions, as you gain evidence of how the candidate has handled similar situations in the past, and these
can concentrate on the specific skill areas of this post.
Example - 'Can you give me an example of when you had to deal with a difficult customer complaint?'
Probing - these are used to follow up after receiving answers to open questions, in order to explore an area in more depth. The
questions should be designed to 'funnel' the information obtained from general to specific information.
Example - 'How would you do it differently next time?'
Reflective - these are powerful and seldom used with skill or consistency. Each question is based on the previous answer and
reflects its content.
Example - 'So, you think that there could have been some improvements. What would have altered the outcome?'
Listening techniques :As the interviewee will be talking for the majority of the time it is vital that interviewers actively listen. The
candidate is providing a lot of information and the interviewer has to be able to recall it, use it, relate it to the key skill areas and
check it for inconsistencies. Reflective questions can be used to pick up on a point the candidate has made and enable you to
probe further. You should concentrate on what the candidate is saying, look at the candidate and ensure that your physical position
reflects your interest. It is vital that all the panel members listen carefully to every answer, even though they may not have asked
the question.
Examples of effective non-verbal responses by interviewers include nodding of the head, smiling and occasional noises of
encouragement. Actions to be avoided are looking at your watch, critical frowning, staring out of the window. Care should be taken
by panel members that non-verbal signals are not communicated between them, indicating what they feel about the candidate.

Interrupting a candidate can be interpreted as discourteous and showing a lack of interest in what the candidate is saying.
However it may be necessary to do so if the candidate has misunderstood the question.
Good active listening involves:
identifying feelings and intentions behind words;
probing answers with further questions;
clarifying and summarising;
evaluating the quality of the answers.
By being empathetic, you will lead the candidate to speak freely and could well reveal information that he/she would not do if an
interviewer was being overbearing or critical. Silence is one of the most effective probing devices. When used at the appropriate
time, it encourages candidates to elaborate their answer.
In short - listen to : · what is being said; · how it is being said; · what is not being said.
Body Language of candidates
Candidates send messages non-verbally which can reveal their emotional state and are well worthwhile being noted by the panel.
The communications expert, Albert Mehrabian's analysis of typical face-to face communications showed that non-verbal
communication has an enormous impact on the understanding of the messages sent by the interviewee in any interview. His results
were : Words alone - 7%; · Voice tones - 38%; · Body language - 55%.
Non-verbal messages are much less likely to be under conscious control and are therefore harder to disguise. They are often
difficult to interpret and care needs to be taken in analysing such messages e.g. a candidate may fold arms as he/she is cold, not
necessarily because he/she is being defensive.
Rehearsal: the Best Laid Plans ...
Rehearsing perfectly worded answers is not a good idea at all Questions you may be expecting are Sei precisely the way you
anticipate. Broad basing your choice of responses is suggested Moreover, you should navigate the interview and introduce topics
related to your core competencies In case you feel that. the moving towards subject / topics in which you are not confident, you
must politely share that you are not su subject General rehearsals do help to polish your performance. Have a mock interview
session. preferab y of a person not hesitant to point out the flaws in your arguments. English. diction and body language
ADOPTING THE
RIGHT ATTITUDE
To be just a little anxious, a little keyed-up about interview is good It generally facilitates rather than inhibitsp Only when you
become overly anxious that you begin to harm your prospects 'Keep your cool' in this kind
Some candidates feel interviews as threatening situations: they worry about their own deficiencies, nervousness, about what the
interviewers think of them. about failing to get the job, and so on It is as failure' overcomes their 'need for achievement' Stressing
the negative aspects of the procedure does littler, take the interview in a more positive way The following are helpful
deal For example an interviewer currently posted as GM in funds department may ask you a question ono try to do as well as I can
in the interview because it will be a good practice for other occasions' and Try regarding their line of thinking. Anticipating the
interviewer's mind-set and preparing accordingly & Do right tense yourself with high expectations. Telling yourself
probably have not got a chance for this, Alternatively, you may prefer to look on the interview as a joint problemsolving
exercise between and another who holds a masters degree in Agriculture may ask you about Organic farming
Thought game, it is a process of informed guessingr interviewer in which you will co-operate together to find whether
this is really the job for you, whethe able to do it well, and whether you would be happy doing it to trace the
background of the Board members Their education background. current profile will more relaxed feeling that can be
helpful to some extent.
Look at the brighter side and keep in mind that you are amongst the very few selected for interview hundreds of aspirants This will
help boost the confidence.
PERSONAL APPEARANCE AND DRESS ,
Over the years. Society has relaxed the dress codes and informal dressing is not looked down upon any more However, one should
be particular in dressing up formally for the interview However, you must present a well groomed look Gentleman: White or light
blue shirt, dark trousers and a matching tie should be preferred. It is essential to wear formal footwear and not sport shoes.
Ladies: Ladies can wear either a dress or a sari as they please It is however essential that they are comfortable and present a
simple but elegant look. Dark colors, flowery prints should be avoided Jewellery and makeup both should be minimal Common
Guidelines: Strong perfumes should be avoided Ensure your nails are trimmed and clean RECEPTION AND THE
IMPORTANCE OF FIRST IMPRESSION
Interviewers sometimes make up their minds about candidates too early in the interview. First impressions can have a powerful
and long lasting effect If you get off on the wrong foot, then there is little time left to set things right Let us look at how you tackle
the introduction.Introduction First thing first: When you enter the interview room, do not forget to close the door behind you. As
you face the interviewer(s), keep a smiling face and walk over to the chair ready for you, but do not sit until asked to do so
Remember not to move the chair.
The way interviewers greet you varies from person to person In any case. do not offer to shake hands until the interviewer extends
Open the conversation by saying 'Good morning Sir / Ma'am' with a smile. Look in the interviewer's eyes Do not just look at the
Chairperson only, give the others a brief glance and smile too (may be even a nod!) Please smile only when you come in, at
appropriate lighter moments in the interview and when you say goodbye.
To sum up the introduction: Take your lead from the interviewer, look at them, put up on a pleasant face and try to exhibit as if
you are glad to be there, even if you feel as though you are facing a firing squad
COMBATING INTERVIEW NERVES
The better your preparation, the more confident you are likely to be. What can you do to keep your calm when you are there?

Try to sit comfortably without actually slouching


Criticism and Arguments: Do not criticize. Never try to find faults. As faras possible,
Stress the good point of others. It is better to be silent than to criticize. Do not get involved in unproductive arguments.
You have not gone to the interview to win a verbal battle but to have an enjoyable conversation. See how you can agree rather
than to disagree. As a last resort, you may agree or disagree.
Listen and Observe: Keep your eyes and ears open. Study their reactions. You will know when tostop talking and when to listen.
As a rule, do not interrupt. If the other person wishes to talk, let him do so. In fact, encourage him to talk. Be an attentive and
enthusiastic listener.
Practice: Practice, Practice and Practice. You must have as much practice as possible. Enlist the goodwill and co-operation of your
friends, colleagues, elders and family members and have practice session with them. The more practice you
MORE IMPORTANT TIPS FOR FACING INTERVIEWS
You do need to be aware about your surroundings and this includes some familiarity with current affairs. Banking industry specific
questions are common. In addition, there are certain questions you may encounter during the interview, in one for or another.
These relate to questions about yourself, what you have been doing and what you want to do in future. It is a good idea to sit for
mock interviews with your friends or colleagues. Remember, practice makes man perfect.Here are some general questions you can
answer during your mock sessions:
INTERVIEW: Body Language and Presentation
We will be discussing the importance of body language and the best way to introduce yourself to the panel. Candidate's body
language and introduction plays an important role in creating an impression in the interviews. How you present yourself, how you
talk to them , how you keep them engrossed, etc. Your impression at the entry point in the interview is of utmost importance.
Behaviour scientists and communication experts have concluded that it takes ten seconds to form the first impression and it takes
another four minutes for the impression to undergo a change of 50% towards positive or negative side.
Important Things to take care of before entering the Room:
 Prior to entering the room, adjust your attire
 Before entering, enquire by saying,"Please may I come in".
 If the door is closed before you enter, make sure you shut the door behind you softly.
 On entering the room face the panel confidently and wish the members.
 If the members of the interview board want to shake hands, then offer a firm grip first maintaining eye contact and smile.
Always make sure that your hand shake is firm and it fits well in the other persons hand.
 Sit down only when asked to do so by the Panel. If the interviewers are standing, wait for them to sit down first before
sitting.
 An alert candidate would diffuse the tense situation with light hearted humour and immediately set rapport with the
interviewers.
Note: We understand that many of you students face an issue regarding confidence, face trouble in having a conversation, or are
not comfortable in initiating a conversation, get butterfly in your stomach when you face an interview.
Well that's because you have a set image about the panellist in your mind, you are scared of their judgement and are not very sure
about your own self.
So how to deal with this situation?
Trick is to have a formal conversation just as you would have with your uncles and aunties, not thinking of what they would think
of you. remember the members of the panellist are not from another planet, rather people like you and me, have had similar
journeys like you from a student to now esteemed bankers.
So prepare your answers to all questions possible before hand,
Teach yourself to talk to the point and without beating around the bush.
Be smart with words.
Once you are prepared, have faith in your self.
Last but not the least, once in the interview room, forget about all your inhibitions and just go ahead with full confidence (but stay
away from overconfidence, be humble always).
FOLLOW THE SEE PRINCIPLE -
S-SMILE
note: does not mean you start smiling and giggling unnecessarily.
E-EYE CONTACT
note: its very important that you maintain eye contact with the interviewers. While talking look at all the panellists, they should feel
that your are involving them in your conversation.
E-ENTHUSIASM
note: be enthusiastic while telling them about yourself, you should not come across as dull, or lazy. Remember you are there to sell
yourself.
ENERGY AND ENTHUSIASM:
The interviewer normally pays more attention if you display an enthusiasm in whatever you say.
You should maintain a cheerful disposition throughout the interview i.e. a pleasant countenance holds the interviewers interest.

Again don't over play your enthusiasm part, rather it should look effortless

HUMOUR
A little humour or wit thrown in the discussion occasionally enables the interviewers to look at the pleasant side of your personality.
If it does not come naturally do not force it.
Injecting humour in to the situation doesn't mean that you should keep telling jokes. It means to make a passing comment that ,
perhaps, makes the interviewer smile. Basically just be yourself, make your self comfortable and the others too.
EYE CONTACT
You must maintain eye contact with the panel, throughout the interview. This shows your self confidence and honesty.
Maintain interviewees while answering, tend to look away. This conveys you are concealing your own anxiety, fear, and lack of
confidence.
Maintaining an eye contact is a difficult process. As the circumstances in an interview are different, the value of eye contact is
tremendous in making a personal impact.
relaxed, thoughtful, caring, or concerned look
normal blinks, genuine smile, relaxed mouth
Have an eye contact while speaking to someone or listening to someone.
VOICE:
Resonant, firm, pleasant
Select the appropriate pitch according to the audience
BE NATURAL:
Many interviewees adopt a stance which is not their natural self. It is amusing for the interviewers when a candidate launches into
an accent which he or she cannot sustain consistently through out the interview or adopt mannerism that are inconsistent with his
or her personality. Interviewers appreciate a natural person rather an actor. It is the best for you to talk in natural manner because
then only you appear genuine.
BODY LANGUAGE:
Walk into the room with energy (does not mean you start galloping like a horse)
Sit straight comfortably without craning your neck. Do not slouch. Shoulders straight neither drooping nor elevated
Look attentive, keen and interested.
 As you sit across the interviewer(s), look confident and relaxed.
 In most cases the interviewers themselves will try to put you at ease.
 Talk clearly, maintaining a pitch that is comfortably audible to the person(s) around.
 Do not get overexcited even while describing your achievements and strengths.
 Listen to the queries attentively, constantly maintaining polite eye contact with the interviewers.
 Nod your head to show that you are listening, interjecting appropriately with ‘Yes Sir/Madam’, absolutely, definitely etc.
 Lean forward a little as you speak and backward as you listen.
 Do not touch your face, or shake your legs.
 Keep your arms either on your sides or in your lap. Do not fold your arms, as it is a sign of rudeness.
 Use short simple sentences while talking.
 Do not make unrealistic tall claims during the interview.
 Never get too arrogant or aggressive in front of the interviewers.
 Do not show your disappointment and disinterest.
 Maintain your poise till the end.
 Always thank the interviewers as you leave.
 Animated hand movement- Whenever you talk it is always good to use your hands to express yourself, it is a sign of self
surety and confidence. Then again it does not mean you start throwing your hands all over the place. Slight movements,
thats it
 Basically the whole idea of giving these tips is to make you realise the importance of being yourself, being human and not
stiff as a robot. Practice remaining calm and composed.

Credit rating agencies

Credit Rating Agencies in India

A credit rating agency is a company which rates the debtors on the basis of their ability to pay back the debt in timely manner.

There are three big credit rating agencievvs in the world which are
 1.Standard & Poor's (S&P) – Headquarter – New York, US
 2.Moody's – Headquarter - New York, US,
 3.Fitch Ratings- New York, US


There are mainly 5 credit rating agencies in India which are

CARE (Credit Analysis and Research):Founded: 1993,Mumbai  It is the second-largest credit rating agency in india


CRISIL (Credit Rating Information Servicesof India Limited):Founded: 1987,mumbai. It is the largest credit rating limited company.with a market share of
greater than 60%.
*CRISIL’s majority
shareholder is
Standard & Poor’s.

ICRA ( Investment information andcredit rating agency)Founded: 1991 at Gurgaon
It is public limited company .Majority share holder is Moodys

SMERA( SME Rating Agency of India Ltd):Founded: 2005 ,mumbai
*SMERA is a full   service credit rating sector
 agency in India, exclusively set up MSME

ONICRA Gurgaon. It is a Pvt sector agency  set up by onida finance

Very useful terms for interviews

Very useful terms for Promotion exams



 Profitability Concepts



1 What is the relevance of profits

Augment economic capital,

Helps retained earnings to increase capital base

Improves Investors confidence

Index of efficient use of funds

Makes a viable organization

2 What is profit and profitability Profit represents an

absolute figure

Profitability is measured by Ratios and shows operational efficiency

3 Name few profitability ratio ROA,NIM,ROE, Book

value,

4 What is ROA, how it is measured and what is the ideal ROA

ROA is Return on Asset and is the ratio of net profit to total assets. The standard measure of ROA

globally is 1%

5 What is NIM, how it is arrived and what is desirable NIM

NIM is Net Interest Margin and is the ratio of net interest income to average earning assets. The desired NIM is

above 3%

6 What is ROE

ROE is Return on Equity / Net worth. It is ratio of Net profit to Average Net worth (Capital + Reserve- intangible

assets)

7 What is Book Value and how it is arrived

It is net worth divided by No. of shares. Market price of share generally factors book value.

8 What is EPS

EPS is Earning Per Share. It is the ratio of net profit to No. of shares

9 What is CRAR, what it indicates

Capital to Risk Weighted Asset Ratio. The total capital, consist of Tier I & Tier II Capital as a ratio of Risk

Weighted Assets. It indicates the soundness and risk bearing ability of a Bank.

10 What do you understand by Yield on Advances

Interest Income on advances divided by average advances indicates average yield on advances. This ratio

enables cost benefit assessment from various loan products.

11 What is yield on Investments

Interest and dividend income on investment divided by average investments indicate yield on investments.

12 What is the cost of deposit

Interest paid on deposit divided by average deposits is called cost of deposit. It consists of Current, SB

and Term Deposit.

13 Which are the operational efficiency ratios,

Cost – Income ratio and Burden ratio is called as operational efficiency ratio.

14 What is Cost Income ratio

Non-Interest Expenditure divided by Net Total Income (Total Income minus

Banking New trends

Inflation index bonds

Inflation Indexed Bond (IIB) is a bond issued by the Sovereign, which provides the investor a constant return irrespective of the level of inflation in the economy. The main objective of Inflation Indexed Bonds is to provide a hedge and to safeguard the investor against macroeconomic risks in an economy.



Issue of IIBs has assumed significance in the context of high level of inflation experienced in the Emerging Market and Developing Economies during the recent years, as the value of money[1] loses rapidly in an environment of high inflation. The issue of Inflation Indexed bonds in advanced economies is limited on account of low inflation experienced in these economies.





Operation of IIBs



For understanding the concept of IIB, it has to be compared with the instrument of fixed deposits with the bank. While fixed deposit offers a fixed rate of interest for the investment for a given number of years, it does not protect the investor from the erosion of real value of the deposit due to inflation. IIB on the other hand, gives a constant minimum real return[2] irrespective of inflation level in the economy. Capital increases with the inflation, so actual interest is better than originally promised. In case of deflation, interest payments decrease with the negative inflation. However, capital does not decline below the face value, ie. Initial investment, in case of deflation. The working of IIB is given through the following example:



End of the 1st year End of the 2nd year

Principal : Rs 1000 Principal : Rs 103

Inflation in the economy : 3 percent Inflation in the economy : 6 percent

Inflation accrual : Rs. 30 Inflation accrual : Rs.61.8

Principal at the end of the first year : Rs 1030 Principal at the end of the 2nd year : Rs 1091.8



Promised rate of return : 3 percent Promised rate of interest : 3 percent

Interest : 1030 x 3/100: Rs 31 Interest : 1091.8 x 3/100: Rs 32.7

Totalreturn:Rs.30(inflation)+Rs:31(interest):Rs 61 Total return:Rs61.8(inflation)+Rs:32.7(interest): :Rs 94.5





Thus, inflation component on principal is not paid with interest but the same is adjusted in the principal. At the time of redemption, adjusted principal or the face value, whichever is higher, would be paid. If adjusted principal goes below the face value due to deflation, the face value would be paid at redemption and thus, capital will get protected. Interest rate will be provided protection against inflation by paying fixed coupon rate/interest rate on the principal adjusted against inflation.



There are no special tax concessions for these bonds. IIBs are treated as government securities (G-Sec) and therefore, would be eligible for short-sale and repo transactions and gets SLR status (i.e., they are eligible to be kept as part of Statutory Liquidity Ratio requirements of banks).





Background



In the Indian context, inflation was one of the major macroeconomic concerns of the economy during the period 2008-2013 where real interest rates[3] were consistently negative. The period also was noted for the high current account deficit (CAD)[4] , which saw huge investment in the alternate instrument – gold – by the households, necessitating heavy import of gold. In order to reduce the attractiveness of gold for investment and reduce the CAD, the Government of India launched Inflation indexed bonds (IIB) on 4 June 2013[5].



The Reserve Bank of India auctioned its first tranche, linking to Wholesale Price Index (WPI) inflation, as WPI headline inflation was then used as the key measure of inflation by RBI. IIB bonds were issued on monthly basis (on last Tuesday of each month) till December 2013. These bonds offered annual return of 1.44% (through half yearly coupon) over and above the headline inflation (WPI). These 10 year bonds could be traded in the Order Matching Negotiated Dealing Systems (NDS-OM), NDS-OM (web-based), Over the Counter (OTC) market, and stock exchanges. Approximately IIB bonds worth Rs 6500 crore were issued in 2013.



Over the time, IIB bonds lost its attractiveness, as there has been significant moderation in inflation since 2014-15. The IIB bonds turned highly illiquid, as WPI inflation remained negative for consecutive 15 months (as on Feb 2015) since November 2014. With a view to improve the liquidity in G Secs market, Government decided to buy back the IIB bonds. The Government of India announced the repurchase of 1.44% Inflation government stocks 2023 in February 2016 through reverse auction for an aggregate amount of Rs. 6500 crore (face value). The repurchase was undertaken as an adhoc measure to redeem the government stock prematurely by utilizing surplus cash balance.



Since April 2014, RBI adopted consumer price index (CPI -combined) as the key measure of inflation for its monetary policy stance. In case RBI issues new IIB bonds in the near future, it would be based on CPI, as CPI (combined) has been accepted by RBI as the key measure of inflation for its monetary policy stance, since 2014.



A predecessor of Inflation Indexed Bonds (IIBs) was Capital Indexed Bonds (CIBs) issued during 1997. However, the CIBs issued in 1997 provided inflation protection only to principal and not to interest payment. IIBs provide inflation protection to both principal and interest payments.





1.Here, real value of money means what one unit of money is capable of purchasing; in short, its purchasing power. For instance, if a person is able to get only 1 unit of a good with Rs. 1 now as compared to 2 units of that good in a previous period, we can say that the value of money has decreased. This happens because the price of the good has doubled.



2.Real Return = Rate of Nominal Return – rate of Inflation



3.See footnote 2



4.When value of imports exceeds that of exports, resulting in net outflow of money from the economy



5.It was announced in the Union Budget 2013-14 as an instrument to protect savings from inflation, especially the savings of the poor and middle classes.

Current affair s on 07.04.2019

Today's Headlines from www:

*Economic Times*

📝 RBI to examine merger proposal of Indiabulls and LVB

📝 Govt may now sell enemy property shares in ACC, Grasim, Tata Steel

📝 SAIL's RMD reports highest ever iron ore production in FY19

📝 Defence production likely to open up for Kerala startups

📝 Proposal to allow banks to buy gold from local refiners discussed

📝 Vodafone Idea, Airtel bet big on machine learning; readying networks for 5G

📝 Global ecommerce sales surged to $29 trillion in 2017

📝 India in continuous talks with US over Iran waiver

*Business Standard*

📝 Next wave of DTH consolidation imminent as Jio GigaFiber readies for launch

📝 Bidding for Jet Airways delayed, banks await RBI nod on debt conversion

📝 BPM companies increasingly moving towards outcome-based deals

📝 Asian Paints counting on core business, allied segments to drive growth

📝 Chegg eyes India for next level growth, aims to cash in on edtech boom

📝 Priority Sector Lending Certificates volume crosses Rs 3-trillion mark

📝 US reaches 65,000 H1B visa cap in five days for Financial Year 2020

📝 Hyundai Motor, Tencent tie up to develop self-driving cars software

📝 Branded apparel makers post steady profit growth in December quarter

*Financial Express*

📝 Future Group’s Foodhall partners with delivery platform Scootsy

📝 Mudra Yojna: About 25 per cent of this year’s target met in just one month

📝 Chinese investors account for 58% Greek ‘Golden Visas’ issued from 2013

📝 India’s imports from China slow down by 5%

📝 India’s GDP to touch $10 trillion, become third largest economy by 2030, says Jaitley

📝 New e-commerce policy: Push for level playing field for offline, online players

📝 Tata Steel posts record output after Bhushan purchase

📝 Zomato costs pile up 6X to Rs 3,500 crore; posts over Rs 2,000 loss in FY19

*Mint*

📝 Pound investors eye Brexit relief as Theresa May pursues deal or delay

📝 Telecom firms should back rollout of public wi-fi hotspots: Niti Aayog secy

📝 RBI to set up regulatory sandbox for fintech firms

📝 Saudi Aramco set for $10 billion bond sale touted by JP Morgan's Jamie Dimon

📝 Deutsche Bank said open to US restructuring in merger talks with Commerzbank

📝 Google accidentally leaks new 'Pixel 3a' smartphone

📝 Zydus receives tentative approval from USFDA for Tofacitinib tablets.

FOREIGN EXCHANGE RESERVES OF INDIA

FOREIGN EXCHANGE RESERVES OF INDIA
➢ IMF has defined Foreign Exchange Reserves as external assets that are readily
available to and controlled by monetary authorities for direct financing of external
payments imbalances.
➢ The Foreign Exchange Reserves of India consists of four categories, i.e.,Foreign
Currency Assets, Gold, Special Drawing Rights (SDRs) and Reserve Tranche
Position (IMF).
➢ In India, 94% of the reserves are invested in foreign currency assets, 5% in gold and
the balance forms the SDRs and IMF reserve position.
➢ Forex reserves in India as on 30th March 2018 reached USD 424.4 billion (Foreign
Currency Assets: USD 399.2 billion, Gold: USD 21.6 billion, SDRs: USD 1.54
billion and Reserve Position in the IMF is USD 2.1 billion)
➢ FCA (Foreign Currency Assets) are maintained as a multi-currency portfolio
comprising major currencies, such as, US dollar, Euro, Pound sterling, Japanese yen,
etc. and are valued in terms of US dollars.
➢ Objectives of holding foreign exchange reserves are:
i) To support and maintain confidence in the policies for monetary and exchange rate
management including the capacity to intervene in support of the national or union
currency
ii) Limit external vulnerability by maintaining foreign currency liquidity to absorb shocks
during times of crisis or when access to borrowing is curtailed
iii) Provide a level of confidence to markets that a country can meet its external
obligations
iv) Demonstrate the backing of domestic currency by external assets assist the
government in meeting its foreign exchange needs and external debt obligations
v) Maintain a reserve for national disasters or emergencies

Forest facilities for residents

Forex Facilities for Residents
(Individuals):::::

Introduction

The legal framework for administration of exchange control in India is provided by the Foreign Exchange Management Act, 1999. Under the Act, freedom has been granted for buying and selling of foreign exchange for undertaking current account transactions. However, the Central Government has been vested with powers in consultation with Reserve Bank to impose reasonable restrictions on current account transactions. Accordingly, the Government has issued Notifications GSR.381(E) dated May 3, 2000, and S.O. 301(E) dated March 30, 2001, imposing certain restrictions on current account transactions in public interest.

These details are available on the Bank’s website besides with the authorised dealers and regional offices of the Foreign Exchange Department. Our experience so far has been that the residents like to get information on several matters relating to various current account transactions and other incidental issues. This pamphlet attempts to answer to all such questions in simple language. While preparing replies to questions, special care has been taken to ensure that the replies are drafted in simple words and reference to technical details are avoided.

 The Foreign Exchange Management Act,1999 (FEMA), has come into force with effect from June 1, 2000. With introduction of the new Act (in place of FERA), certain structural changes have been introduced and now all transactions involving foreign exchange have been classified either as Capital or Current Account transactions. All transactions undertaken by a resident that do not alter his assets or liabilities outside India are current account transactions. In terms of Section 5 of the FEMA, persons are free to buy or sell foreign exchange for any current account transaction except for those transactions on which Central Government has imposed restrictions, vide its Notification No.G.S.R.381(E) dated May 3, 2000 (as amended from time to time). Full text of the said Notification is available in the Official Gazette. It is also available as annexure to our Master Circular on Miscellaneous remittances available at our website www.mastercirculars.rbi.org.in.Incidentally, no release of foreign exchange is admissible for any kind of travel to Nepal and Bhutan or for any transaction with persons resident in Nepal and Bhutan.

Some of the commonly or frequently asked questions by residents in connection with foreign exchange facilities or restrictions have been answered in the following paragraphs.

I. Guidelines on travel related matters

1. Who is a resident?

In terms of Section 2(v) of FEMA, 1999, a "person resident in India" means –

a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include –
(A) a person who has gone out of India or who stays outside India, in either case -

for or on taking up employment outside India, or
for carrying on outside India a business or vocation outside India, or
for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than –

for or on taking up employment in India, or
for carrying on in India a business or vocation in India, or
for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
any person or body corporate registered or incorporated in India,
an office, branch or agency in India owned or controlled by a person resident outside India,
an office, branch or agency outside India owned or controlled by a person resident in India;
2.From where one can buy foreign exchange?

Foreign exchange can be purchased from any authorised dealer. Besides authorised dealers, full-fledged money changers are also permitted to release exchange for business and private visits.

3.Who is an authorized dealer?

An authorized dealer is normally a bank specifically authorized by the Reserve Bank under Section 10(1) of FEMA,1999, to deal in foreign exchange or foreign securities.

4.How much exchange is available for a business trip?

Authorized dealers can release foreign exchange up to USD 25,000 for a business trip to any country other than Nepal and Bhutan. Release of foreign exchange exceeding USD 25,000 for a travel abroad (other than Nepal and Bhutan) for business purposes, irrespective of period of stay, requires prior permission from Reserve Bank. Visits in connection with attending of an international conference, seminar, specialised training, study tour, apprentice training, etc., are treated as business visits. Visit abroad for medical treatment and/or check up also falls within this category.

5. Can one obtain additional foreign exchange for medical treatment outside India?

Authorized dealers may release foreign exchange upto USD 100,000 or its equivalent to resident Indians for medical treatment abroad on self declaration basis of essential details, without insisting on any estimate from a hospital/doctor in India/abroad.

A person visiting abroad for medical treatment can obtain foreign exchange exceeding the above limit, provided the request is supported by an estimate from a hospital/doctor in India/abroad.

This exchange is to meet the expenses involved in treatment and in addition to the amount referred to in paragraph 1 above.

6. How much exchange is available for studies outside India?

Students going abroad for studies are treated as Non-Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA. In addition, they can receive remittances upto USD 100,000 from close relatives from India on self-declaration, towards maintenance, which could include remittances towards their studies also. Educational and other loans availed of by students as resident in India can be allowed to continue. There is no dilution in the existing remittance facilities to students in regard to their academic pursuits.

7. How much foreign exchange can one buy when going for tourism to a country outside India?

In connection with private visits abroad, viz., for tourism purposes, etc., foreign exchange up to USD10,000, in any one calendar year may be obtained from an authorised dealer. The ceiling of USD10,000 is applicable in aggregate and foreign exchange may be obtained for one or more than one visit provided the aggregate foreign exchange availed of in one calendar year does not exceed the prescribed ceiling of US$10,000 {The facility was earlier called B.T.Q or F.T.S.}. This limit of USD10,000 can be availed of by a person along with foreign exchange for travel abroad for any purpose, including for employment or immigration or studies. However, no foreign exchange is available for visit to Nepal and/or Bhutan for any purpose.

8. How much foreign exchange is available to a person going abroad on employment?

Person going abroad for employment can draw foreign exchange upto USD100,000 from any authorised dealer in India on the basis of self-declaration.

9. How much foreign exchange is available to a person going abroad on emigration?

Person going abroad on emigration can draw foreign exchange upto USD100,000 on self- declaration basis from an authorized dealer in India. This amount is only to meet the incidental expenses in the country of emigration.

No amount of foreign exchange can be remitted outside India to become eligible or for earning points or credits for immigration. All such remittances require prior permission of the Reserve Bank.

10. Is there any purpose for which going abroad requires prior approval from the Reserve Bank or Govt. of India?

Dance troupes, artistes, etc., who wish to undertake cultural tours abroad, should obtain prior approval from the Ministry of Human Resources Development, Government of India, New Delhi.

11. How much foreign exchange can be purchased in foreign currency notes while buying exchange for travel abroad?

Travellers are allowed to purchase foreign currency notes/coins only up to USD 2000. Balance amount can be taken in the form of traveller’s cheque or banker’s draft. Exceptions to this are (a) travellers proceeding to Iraq and Libya can draw foreign exchange in the form of foreign currency notes and coins not exceeding US$ 5000 or its equivalent; (b) travellers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States can draw entire foreign exchange released in form of foreign currency notes or coins.

12. Do same Rules apply to persons going for studies abroad?

For the purpose of studies abroad, exchange for maintenance expenses is released in the form of (i) currency notes up to US$ 2,000, (ii) the balance foreign exchange may be taken in form of traveller’s cheques or bank draft payable overseas.

13. How much in advance one can buy foreign exchange for travel abroad?

The foreign exchange acquired for any purpose has to be used within 60 days of purchase. In case it is not possible to use the foreign exchange within the period of 60 days it should be surrendered to an authorised dealer.

14. Can one pay by cash full rupee equivalent of foreign exchange being purchased for travel abroad ?

Foreign exchange for travel abroad can be purchased from banks against rupee payment in cash up to Rs.50,000/-. However, if the rupee equivalent exceeds Rs.50,000/-, the entire payment should be made by way of a crossed cheque/banker’s cheque/pay order/demand draft only.

15. Within what period a traveller who has returned to India is required to surrender foreign exchange?

On return from a foreign trip travellers are required to surrender unspent foreign exchange held in the form of currency notes within 90days and travellers’ cheques within 180 days of return. However, they are free to retain foreign exchange upto USD 2,000, in the form of foreign currency notes or TCs for future use or credit to their RFC(Domestic) Account without any limit.

16. On return to India can one retain some foreign exchange?

Residents are permitted to hold foreign currency up to USD 2,000 or its equivalent or credit to their RFC(Domestic) Account without any limit provided the foreign exchange was -

acquired by him while on a visit to any place outside India by way of payment for services not arising from any business in or anything done in India; or
acquired by him, from any person not resident in India and who is on a visit to India, as honorarium or gift or for services rendered or in settlement of any lawful obligation, or
acquired by him by way of honorarium or gift while on a visit to any place outside India; or
acquired by him from an authorised person for travel abroad and represents the unspent amount thereof.
17. Is one required to surrender foreign coins also to an authorised dealer?

There is no restriction on residents holding foreign coins.

18. How much foreign exchange can one send as gift / donation to a person resident outside India?

Any person resident in India can remit upto USD 5,000 in any one year as a gift to a person residing outside India or as donation to a charitable/educational/religious/ cultural organisation outside India. Remittances exceeding the limit require prior permission from the Reserve Bank.

19. Is one permitted to use International Credit Card (ICC) for undertaking foreign exchange transactions?

Use of the International Credit Cards (ICCs) / ATMs/ Debit Cards can be made for making personal payments like subscription to foreign journals, internet subscription, etc., and for travel abroad in connection with various purposes. Your entitlement of foreign exchange on International Credit Cards (ICCs) is limited by the credit limit fixed by the card issuing authority only. With ICCs you can i) meet expenses/make purchases while abroad ii) make payments in foreign exchange for purchase of books and other items through internet in India. If you have a foreign currency account in India or with a bank overseas, you can even obtain ICCs of overseas banks and reputed agencies.

Use of these instruments for payment in foreign exchange in Nepal and Bhutan is not permitted.

20. While coming into India how much Indian currency can be brought in?

A person coming into India from abroad can bring in with him Indian currency notes within the limits given below:

a.       upto Rs. 5,000 from any country other than Nepal or Bhutan, and

b.       any amount in denomination not exceeding Rs.100 from Nepal or Bhutan.

21. While going abroad how much foreign exchange, in cash, can a person carry?

Residents are free to carry the foreign exchange purchased from an authorised dealer or money changer in accordance with the Rules. They are, however, allowed to carry foreign exchange in the form of currency notes/coins upto USD 2,000 or its equivalent only. Balance amount can be carried in the form of traveller’s cheque or banker/s draft. (In this connection please see item No.9).

22. While coming into India how much foreign exchange can be brought in?

A person coming into India from abroad can bring with him foreign exchange without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in exceeds USD 10,000/- or its equivalent and/or the value of foreign currency exceeds USD 5,000/- or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.

23. While going abroad how much foreign exchange can a person carry?

Residents are free to carry the foreign exchange purchased from an authorised dealer or money changer in accordance with the Rules. In addition, they can also carry up to USD 2,000, or higher amounts representing the unutilized balance of a previous trip, if already held by them (see item13 above) in accordance with the Regulations.

24. Is one required to follow complete export procedure when a gift parcel is sent outside India?

A person resident in India is free to send (export) any gift article of value not exceeding Rs. 5,00,000 provided export of that item is not prohibited under the extant EXIM Policy.

25. How much jewellery one can carry while going abroad?

Taking personal jewellery out of India is governed by Baggage Rules framed under Export-Import Policy by the Government of India. No approval of Reserve Bank is required in this case.

26. Can a resident extend local hospitality to a non-resident?

A person resident in India is free to make any payment in Indian Rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India.

27. Can residents purchase air tickets in India for their travel not touching India?

Residents may book their tickets in India for their visit to any third country. That is residents can book their tickets for travel for instance to London/New York through domestic/foreign airlines in India itself.

28. Can a resident open a foreign currency denominated account in India?

Persons resident in India are permitted to maintain foreign currency accounts in India under following two Schemes:

EEFC Accounts:-
To avoid exchange loss on conversion of foreign exchange into Indian Rupee & Rupee into foreign exchange, residents can retain upto 50% of foreign currency remittances received from abroad in a foreign currency account, viz., EEFC account, with an authorised dealer in India. Funds held in EEFC account can be utilised for current account transactions and also for approved capital account transactions as specified by the extant Rules/Regulations/Notifications/Directives issued by the Government/RBI from time to time.

RFC Accounts :-
Returning Indians, i.e., those Indians, who were non-residents earlier, and are returning now for permanent stay, are permitted to open, hold and maintain with an authorised dealer in India a Resident Foreign Currency (RFC) Account to keep their foreign currency assets. Assets held outside India at the time of return can be credited to such accounts. The foreign exchange (i) received or acquired as gift or inheritance from a person referred to sub-section (4) of section 6 of FEMA,1999 or (ii) referred to in clause (c) of section 9 of the Act or acquired as gift or inheritance therefrom may also be credited to this account.

The funds in RFC account are free from all restrictions regarding utilisation of foreign currency balances including any restriction on investment outside India. The facility is also available to residents provided foreign exchange to be credited to such account is received out of certain specified type of funds/accounts.

c. RFC (Domestic)Account:-

A person resident in India can open, hold and maintain with an authorized dealer in India, a Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travellers cheques from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawful obligation from any person not resident in India.

The account may also be credited with/opened out of foreign exchange earned like proceeds of export of goods and/or services, royalty, honorarium, etc., and/or gifts received from close relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals.

29. Can a person resident in India hold assets outside India?

In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India. (Please also refer to the Liberalised Remittance Facility of USD 25,000 discussed below).

II. Liberalised Remittance Scheme of USD 25,000.

30. What is the liberalised Remittance Scheme of USD 25,000?

This is a new facility extended to all resident individuals under which they may freely remit upto USD 25,000 per calendar year for any permissible current or capital account transaction or a combination of both.

31.Who is eligible to avail of this Liberalised Remittance Facility?

The facility is available to resident individuals only.

32.Is there any frequency for the remittance?

Resident individuals can avail of the remittance facility under the Scheme once in a calendar year.

33. What are the purpose/s for which remittance can be made under the Scheme?

This facility is available for making remittance/s for any permissible current or capital account transaction or a combination of both. It is not available for purposes specifically prohibited (Schedule I) or regulated by the Government of India (Schedule II) of Foreign Exchange Management (Current Account Transactions) Rules, 2000.

34. Can residents avail of this facility for acquiring immovable property and other assets abroad?

Yes. Individuals are free to use this Scheme to acquire and hold immovable property, shares or any other asset outside India without prior approval of RBI.

35.Can individuals open a foreign currency account abroad for making remittance under the scheme?

Yes. Individuals are free to open, hold and maintain foreign currency accounts with a bank outside India for making remittances under the Scheme without the prior approval of RBI. The account can be used for putting through any transaction connected with or arising from remittances under the Scheme.

36.What is the impact of the Scheme on the existing facilities for private/business travel, gift, donation, studies, medical treatment etc./items covered in Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000?.

The facility under the Scheme is in addition to those already available under Foreign Exchange Management (Current Account Transactions) Rules, 2000.

37. Can an individual send remittance under the Scheme to any country?

Remittance cannot be made directly or indirectly to Bhutan, Nepal, Mauritius or Pakistan. The facility is also not available for making remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as ‘non-co-operative Countries or Territories' viz., Cook Islands, Egypt, Guatemala, Indonesia, Myanmar, Nauru, Nigeria, Phillippines and Ukraine.

Further, remittance under the facility cannot be made to individuals and entities identified as posing significant risk or committing acts of terrorism as advised to banks by RBI from time to time.

38.What are the requirements to be complied with by the remitter?

The individual will have to designate a branch of an AD through which all the remittances under the Scheme will be made. He has to furnish an application-cum-declaration in the specified format regarding the purpose of the remittance and declare that the funds belong to him and will not be used for purposes prohibited or regulated under the Scheme.

39.If an investment of USD 25,000 rises in value within the year, can one book profits and invest abroad again?

The investor is free to book profit or loss abroad and to invest abroad again. He is under no obligation to repatriate the funds sent abroad.

40. Can an individual, who has repatriated the amount sent during the calendar year, avail of the facility once again?

Once a remittance is made for an amount upto USD 25,000 during the calendar year, he would not be eligible to make any further remittances under this route, even if the proceeds of the investments have been brought back into the country.

41. Can remittances be made only in US Dollars?

The remittances can be in any currency equivalent to USD 25,000 in a calendar year.

42.Last year, resident investors could invest in equities of overseas listed firms that hold at least 10% in a listed Indian firm. Does this condition still apply?

The stipulation that investors could invest in equities of overseas listed firms that hold at least 10% in a listed Indian firm which was made in terms of our A.P.(DIR Series) Circular No.66 dated January 13, 2003 continues as an additional facility. Under the current Liberalised Remittance Scheme, no such stipulation has been made.

43.Can an individual investor sign-on with an international online brokerage and buy and sell stocks ( without exceeding the USD 25,000 limit)?

The Scheme does not restrict such transactions, provided the transactions are within the limit of USD 25,000 per calendar year and is otherwise in order.

III. Guidelines for Financial Intermediaries offering special schemes, protection under the Scheme.

44.Are intermediaries expected to seek specific approval for making overseas investments available to clients?

Banks including those not having operational presence in India are required to obtain prior approval from Reserve Bank for soliciting deposits for their foreign/overseas branches or for acting as agents for overseas mutual funds or any other foreign financial services company.

45.What restrictions have been placed on the scope of activity of the intermediaries?

It has been decided in public interest that all banks, both Indian and foreign, including those not having an operational presence in India, should seek prior approval from Reserve Bank for the schemes being marketed by them in India to Indian residents either for soliciting foreign currency deposits for their foreign/overseas branches or for acting as agents for overseas mutual funds or any other foreign financial services company.

46. Are there any restrictions on the kind/quality of debt or equity instruments an individual can invest in?

No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 25,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.

47.Whether minor resident Individuals would be permitted to open, maintain and hold such foreign currency accounts if the same is permissible as per local law in the country of the overseas branch?

Banks may take necessary steps in the matter based on the settled legal position regarding enforcement of the declaration in case the remittance is made on behalf of a minor.

48.Whether credit facilities in Indian Rupees or foreign currency would be permissible against security of such deposits?

No. The Scheme does not envisage extension of credit facility against the security of the deposits.

49.Can bankers open foreign currency accounts in India for residents under the Scheme?

No. Banks in India can not open a foreign currency account in India for residents under the Scheme.

50.Can OBU in India be treated on par with a branch of the bank outside India for the purpose of opening of foreign currency accounts by residents under the Scheme?

No. For the purpose of the Scheme, an OBU in India is not treated as an overseas branch of a bank in India.

https://iibfadda.blogspot.com/2018/07/forex-for-individuals.html?m=1

Treasury Products

Treasury Products

Treasury Products are of 3 types:
 Products of Forex Market
 Products of Money Market
 Products of Security Market

Forex Market Products: It is virtual market without boundaries, highly volatile and liquid and
most transparent. It includes the following products.
1. Spot Trades: Currencies are generally bought and sold at spot rates when payment and
settlement takes place on 2nd working day. Cash and Tom rates are quoted at discount
from Spot rate.
2. Forward Trades : Purchase or sale of currency at future rates. Exchange takes place
after few days/months. Importers and Exporters cover risks by Forward trades. Forward
rates are arrived at on the basis of interest rate differentials of two currencies.
3. Swaps: Foreign Exchange transactions where one currency is sold and purchased for
another simultaneously is called Swap. Swap Deal may involve:Simultaneous purchase
of spot and sale of forward or vice versa. It may also involve Simultaneous sale and
purchase, both forward but for different maturities. It is called ―Forward to Forward
Swap‖.
4. Investment in Foreign Currencies: If forex is surplus with bank, it makes investment.
Surplus arises from profits of treasury business, overseas operations, forex borrowings,
NRE, FCNR and EEFC deposits. Investment can be of following 3 types:
 Interbank loans- normally not more than 1 year
 Short term investments in T-bills and CPs issued by multinational agencies
 Some Correspondent banks offer automatic investment facility in Nostro
Accounts subject to minimum balance.
5. Foreign Currency Loans: Banks extend WC loans in foreign currency and for this
purpose, clearance of Treasury is required.
6. Rediscounting of Foreign Bills :Treasury refinances the Foreign currency bills
purchased/negotiated by another bank. The advance covers Usance period 15-360
days.

Money Market Products: Money market products relate to raising and deploying short
term resources with maturity Maximum 1 year. The money market products are:
1. Call Money: It refers to Overnight placement. It needs to be repaid on Next Working
Day. O/N MIBOR Rate is the indicative rate. Non bank players (FIs/MFs) are not
eligible to participate.
2. Notice Money: It is placement of funds beyond overnight up to maximum period of
14 days.
3. Term Money: It deals with placement of funds in excess of 14 days up to 1 year.
1 to 6 month products are very common.
Other Money Market Products:
1. Treasury Bills:
 These are issued by Govt. of India through RBI.
 Tenure is 91Days, 182 Days and 364 Days.
 These are issued at Discount in auction.
 Banks and PDs participate in the auction.
 The auction is also available to all financial players (FIs/MFs/Corporate).
 Auction takes place on Wednesday every week in case of 91 days bills.
 It takes place on Wednesday every Fortnight in case of 182 D and 364 D bills.
2. Commercial Papers & 3. Certificates of Deposits
CP and CD Commercial Papers – CP:
 CP is issued by Corporate with Net Worth minimum 4
Crore, Rating min.P2 (now A2) and availing WC limit from
any bank.
 CP is issued with tenure 7 Days to 1 year.
 CP is issued in multiples of Rs. 5.00 lac.
 CP is Promissory Note and is Negotiable and also attracts
Stamp Duty.
 It is fairly active in Secondary market.
 It is in Demat form and the price is less than Face Value.
Certificate of Deposit – CD
 CD is issued by banks
 CD is issued with tenure 7 Days to 1 year.
 CD is issued in multiples of Rs. 1.00 lac
 CD is Promissory Note and is Negotiable and also attracts
Stamp Duty.
 CD is not very active in Secondary market
 .
3. LAF – Repo and Reverse Repo
It is Lending and Borrowing money for short term period (1 day to 1 year)
Under Repo, RBI purchases securities with commitment to sell at a later date in order to
Inject Liquidity. Presently, Govt. securities are dealt with. All Repo transactions are
routed through CCIL. RBI has permitted Repo in Corporate securities for only ―AA‖ rated
companies. But the market is yet to be activated.
Under Reverse Repo, RBI sells securities with a commitment to buy at a later date in
order to Contain Liquidity.

Repo and Reverse Repo transactions are generally conducted for Overnight period
through Auction Twice Daily. The minimum Bid is Rs. 5.00 crore and its multiples.
Margin is normally 5%.
(Total available funds to a bank under LAF will be capped at 0.5% of NDTL w.e.f.
24.7.2013)
Latest Repo Guidelines as per Monetary policy dt. 3.6.2014
 Cap of Overnight Repo reduced from 0.5 % to 0.25% of NDTL
 Continuation of Term Repo up to 0.75% (cap) of NDTL under 7 days to 14 days
term repos.
4. CBLO : Collateralized Borrowings and Lending Obligations:
It is money market instrument launched by CCIL. Borrower can deposit G-sec with CCIL
and borrow funds from others who have surplus funds subject to re-purchase of
securities. The tenure is 1 day to 1 year.
Bills Rediscounting:
Treasury re-discounts bills which are already discounted by other banks. The tenure is
3-6 months.
Security Market Products: Securities constitute Shares, Debentures, Bonds, and Govt
Securities etc. The various types of securities are:
1. Govt. Securities
 These are issued by PDO (Public Debt Office) of RBI.
 Price is determined in auction
 There is active trading in Secondary market.
 If Yield rate is more than coupon rate, these are issued at a discount.
 Open Market Operations are conducted by GOI to maintain liquidity position.
 SLR requirements are met by banks by investing in HTM securities.
2. Corporate Debt Papers
 These are medium and long term Bonds and Debentures issued by Corporate
and FIs.
 These are non-SLR securities.
 These form part of Tier –II Capital.
 Yield is more than that of Govt. Securities.
3. Debentures and Bonds: Both are Debt instruments and form part of Tier-II Capital.
SEBI has control over issuance and redemption.

Debenture Bond
Issued by Corporate in Private sector Issued by institutions in Public sector
It is Secured by Floating charge It is not secured
Provisions of Company Law applies It is governed by Indian Contract Act
It can be transferred through registration It is negotiable instrument
It can be convertible or non-convertible  Bond, if given option can be
convertible into equity shares.
It can be
 Zero Coupon Bond
 Perpetual Bond
 Floating Bond
 Deep Discount
4. Equities: It is Share Capital issued by both Private sector and Public sector Companies
to raise funds from public. The people who invest are called Shareholders:
 Bank can invest subject to limit exposure set by RBI for Capital Market
 SEBI has full control and these are traded in Stock Exchanges.
 Derivative products are also available.
 If offered by Company, it is called Primary Market. If purchased through Stock
Exchanges, it is called Secondary market.
Equity Share Preference Share
It is permanent capital and is not
redeemed. It forms part of Tier-I Capital.
It may be redeemable or non-redeemable.
If redeemable, forms part of Tier-II Capital
Dividend is paid out of profits after making
payment to Preference Share-holders.
Preference is given while paying
dividend.Unpaid dividend can be carried
forward. This is why these are called
Cumulative Preference shares.
The Company, if liquidated, pays to Equity
Shares at last.
Preference Shares are given preference
for payment at the time of liquidation.
These carry Voting Rights. These don’t carry Voting rights.
Generally Preference Shares are
Cumulative and Redeemable.

TT Rates and bill Rates

TT Rates and Bill Rates

Following 4 types of buying and selling rates are important:
1. TT Buying rate
2. Bill Buying rate
3. TT Selling rate
4. Bill Selling rate
In Interbank market, exchange rate is quoted up to 4 decimals in multiples of 0.0025. e.g.
1USD=53.5625/5650
For customers the exchange rate is quoted in two decimal places i.e. Rupees and paisa. e.g. 1
USD =Rs. 55.54.
Amount being paid or received will be rounded off to nearest Rupee.

TT Buying Rate
It is required to calculate when our Nostro account is already credited or
being credited without delay e.g. Receipt of DD, MT, TT or collection of
Foreign bills. This rate is used for cancellation of Forward Sales Contract.
Calculation
Spot Rate – Exchange Margin
Bill Buying Rate Bill Buying rate is applied when bank gives INR to the customer before
receipt of Foreign Exchange in the Nostro account i.e. Nostro account is
credited after the purchase transaction. In such cases.
Examples are:
 Export Bills Purchased/Discounted/Negotiated.
 Cheques/DDs purchased by the bank.
Calculation
Spot Rate + Forward Premium (or deduct forward discount) – Exchange
margin.
TT Selling Rate Any sale transaction where no delay is involved is quoted at TT selling rate.
It is desired in issue of TT, MT or Draft. It is also desired in crystallization of
Export bills and Cancellation of Forward purchase contract.
Calculation
Spot Rate + Exchange Margin
Bill Selling Rate It is applied where handling of documents is involved e.g. Payment against
Import transactions:
Calculation
Spot Rate + Exchange Margin for TT selling + Exchange margin for Bill
Selling

TT rates and bill Rates

TT Rates and Bill Rates:;

Following 4 types of buying and selling rates are important:
1. TT Buying rate
2. Bill Buying rate
3. TT Selling rate
4. Bill Selling rate
In Interbank market, exchange rate is quoted up to 4 decimals in multiples of 0.0025. e.g.
1USD=53.5625/5650
For customers the exchange rate is quoted in two decimal places i.e. Rupees and paisa. e.g. 1
USD =Rs. 55.54.
Amount being paid or received will be rounded off to nearest Rupee.

TT Buying Rate:::

It is required to calculate when our Nostro account is already credited or
being credited without delay e.g. Receipt of DD, MT, TT or collection ofForeign bills. This rate is used for cancellation of Forward Sales Contract.
Calculation
Spot Rate – Exchange Margin

Bill Buying Rate::

Bill Buying Rate Bill Buying rate is applied when bank gives INR to the customer before
receipt of Foreign Exchange in the Nostro account i.e. Nostro account is
credited after the purchase transaction. In such cases.
Examples are:
 Export Bills Purchased/Discounted/Negotiated.
 Cheques/DDs purchased by the bank.
Calculation

Spot Rate + Forward Premium (or deduct forward discount) – Exchange margin.

TT Selling Rate::

TT Selling Rate Any sale transaction where no delay is involved is quoted at TT selling rate.
It is desired in issue of TT, MT or Draft. It is also desired in crystallization of
Export bills and Cancellation of Forward purchase contract.
Calculation
Spot Rate + Exchange Margin

Bill Selling Rate:::

Bill Selling Rate It is applied where handling of documents is involved e.g. Payment against
Import transactions:
Calculation
Spot Rate + Exchange Margin for TT selling + Exchange margin for Bill
Selling

Examples::

Q. 1
Bank received MT of USD 5000 on 15th Sep. The Nostro account was already credited. What
amount will be paid to the customer: Spot Rate 34.25/30. Oct Forward Differential is 22/24.
Exchange margin is .80%
Solution
TT buying Rate will be applied
34.25 - .274 = 33.976 Ans.

Q. 2
On 15th July, Customer presented a sight bill for USD 100000 for Purchase under LC. How
much amount will be credited to the account of the Exporter. Transit period is 20 days and
Exchange margin is 0.15%. The spot rate is 34.75/85. Forward differentials:
Aug: .60/.57 Sep:1.00/.97 Oct: 1.40/1.37
Solution
Bill Buying rate of August will be applied.
Spot Rate----34.75 Less discount .60 = 34.15
Less Exchange Margin O.15% i.e. .0512 =34.0988 Ans.
( Transit period is rounded to next month since currency will be cheaper as it is buy transaction)

Q. 3
Issue of DD on New York for USD 25000. The spot Rate is IUSD = 34.3575/3825 IM forward
rate is 34.7825/8250
Exchange margin: 0.15%

Solution:
TT Selling Rate will Apply
Spot Rate = 34.3825 Add Exchange margin (.15%) i.e. 0.0516
TT Selling Rate = Spot Rate + Exchange Margin = 34.4341 Ans.

Q. 4
On 12th Feb, received Import Bill of USD-10000. The bill has to retired to debit the account of
the customer. Inter-bank spot rate =34.6500/7200. The spot rate for March is 5000/4500. The
exchange margin for TT selling is .15% and Exchange margin for Bill selling is .20%. Quote rate
to be applied.
Solution
Bill Selling Rate will be applied.
Spot Rate + Exchange margin for TT Selling + Exchange margin for Bill selling =
34.7200+.0520+.0695 = 34.8415 Ans.