1. Explain me what is ‘Availability Float'?
Availability Float is a time difference between deposits made, and the funds are actually available in the account. It is time to process a physical cheque into your account.
For example, you have $20,000 already in your account and a cheque of another $10,000 dollar is deposited in your account but your account will show balance of $20,000 instead of $30,000 till your $10,000 dollar cheque is cleared this processing time is known as availability float.
2. Explain what is ‘Bill Discount'?
‘Bill Discount' is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at less than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is $1000; the electricity bill company will sell the bill to the bank for 10% to 20% discount to the face value. Here, the bank will buy the electricity bill for $900 whose face value is $1000, now the bank will recover, full amount of bill from the customer i.e $1000. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.
3. Explain what is adjustment credit?
Adjustment credit is a short-term loan made by the Federal Reserve Bank (U.S) to the commercial bank to maintain reserve requirements and support short term lending, when they are short of cash.
4. Explain me what is ‘Cheque Discount'?
Cheque discounting service is offered only by few banks. For instance, if you have a cheque of $3000 outstation and the cheque will take 7 seven days for clearance, then bank will offer you a service for early payment. The bank can make an early payment, but they will pay only for certain percentage of the actual amount, here they will pay you $2000 but they will charge interest on it and the remaining $1000 will be paid, once the outstation cheques get clear.
5. Explain me what do you mean by ‘foreign draft'?
Foreign draft is an alternative to foreign currency; it is generally used to send money to a foreign country. It can be purchased from the commercial banks, and they will charge according to their banks rules and norms. People opt for ‘foreign draft' for sending money as this method of sending money is cheaper and safer. It also enables receiver to access the funds quicker than a cheque or cash transfer.
6. Explain me what are payroll cards?
Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees. Through payroll card, employer can load salary payments onto an employee's smart card, and employee can withdraw the salary even though he/she doesn't have an account in the bank.
7. Tell me are you efficient and organized with paperwork?
I am very efficient and organized with paperwork. I like to keep papers and paperwork together through files and folders and which helps me insure that I maintain attention to detail without getting documents misplaced.
8. Explain me how Would You Handle an Irate Customer?
During your time as a loan officer, there will be customers who become very upset with your decisions. For instance, if a gentleman is unable to get financing for a new home for his family, he may become irate; it will be your responsibility to take ownership of the situation. “In the event that I am dealing with an irate customer, I will take the time to listen to the complaint very carefully and provide empathetic statements. If I cannot provide the exact resolution the customer wants, I will offer other products and services as well as financial advice that may help to calm the situation” is along the lines of what your potential employer wants to hear.
9. Explain what ‘LIBOR' stands for?
‘LIBOR' stands for London Inter-Bank Offered Rate. As the name suggest, it is an average interest rate offered for U.S dollar or Euro dollar deposited between groups of London banks. It is an international interest rate that follows world economic condition and used as a base rate by banks to set interest rate. LIBOR comes in 8 maturities from overnight to 12 months and in 5 different currencies. Once in a day LIBOR announces its interest rate.
10. Explain me what is ‘prime rate'?
Basically, ‘prime rate' is the rate of interest that is decided by nations (U.S.A) largest banks for their preferred customers, having a good credit score. Much ‘variable' interest depends on the ‘prime rates'. For example, the ‘APR' (Annual Percentage Rate) on a credit card is 10% plus prime rate, and if the prime rate is 3%, the current ‘APR' on that credit card would be 13%.
