Banking Viva Mastery

What they evaluate: Clarity, confidence, and relevance.

"My name is Shahiduzzaman Robin. I have completed my BBA in Banking and Insurance from the University of Dhaka, and I have also finished my MBA in the insurance stream, with results pending."

"I come from Brahmanbaria and moved to Dhaka for higher education, which helped me adapt to new environments and challenges."

"Professionally, I have experience in both creative and client-facing roles. I worked as a Graphic Design Intern at Learning Bangladesh, where I contributed to marketing campaigns. Currently, I am working as a Virtual Assistant at MediaE360, where I manage client communication and identify suitable Upwork opportunities."

"Alongside this, I have developed leadership skills as the Head of the Banking and Insurance Club at Dhaka University and as the General Secretary of Titas DU Students Association."

"I am particularly interested in banking because it aligns with my academic background and my interest in financial systems, and I am eager to start my career in a structured, growth-oriented institution like Eastern Bank."

What they evaluate: Value proposition.

"I believe I bring a combination of academic knowledge, practical exposure, and leadership experience."

"My academic background in banking and insurance provides me with a strong theoretical foundation. My work experience has improved my communication, client handling, and problem-solving skills."

"Additionally, my leadership roles have helped me develop teamwork, responsibility, and decision-making abilities."

"I am highly adaptable, quick to learn, and committed to building a long-term career in banking. I believe these qualities make me a strong fit for the MTO role."

Strengths:

• Strong communication and client management skills
• Leadership and teamwork experience
• Adaptability and quick learning ability

Weakness:

"Sometimes I tend to focus too much on perfection, which can slow me down. However, I am actively working on balancing quality with efficiency by setting clear time limits for tasks."

"I would first listen carefully without interrupting to understand the issue. Then I would acknowledge their concern and show empathy."

"After that, I would explain the solution clearly or escalate the issue if necessary. Finally, I would ensure proper follow-up so the customer feels valued and satisfied."

"As the Head of the Banking and Insurance Club at Dhaka University, I organized events, managed teams, and coordinated with stakeholders."

"This role taught me how to delegate tasks, manage time, and handle responsibilities effectively."

"Similarly, as General Secretary of Titas DU Students Association, I worked closely with different teams, which strengthened my communication and leadership skills."

"In five years, I see myself as a skilled banking professional with strong expertise in a specific area such as corporate banking or risk management."

"I aim to take on greater responsibilities and contribute significantly to the growth of the bank."

• Faster service
• Digital solutions
• Skilled employees
• Personalized services

"I prioritize my tasks, stay organized, and focus on one challenge at a time. Breaking large problems into smaller, manageable steps helps me maintain efficiency without getting overwhelmed."

"The Chairman of Eastern Bank Limited (EBL) is Md. Showkat Ali Chowdhury. He is a successful businessman and has been leading the board with his extensive experience in the financial and commercial sectors."

"The Managing Director & CEO of Eastern Bank Limited (EBL) is Ali Reza Iftekhar. He is a prominent banker in Bangladesh, known for his leadership in driving EBL toward digital innovation and excellence."

"Eastern Bank Limited (EBL) began its journey in 1992. Over the years, it has established itself as a leading private commercial bank in Bangladesh, recognized for its strong corporate governance and customer-centric approach."

"EBL Skybanking is a state-of-the-art, all-in-one mobile banking application from Eastern Bank. It offers a wide range of services, including real-time fund transfers, bill payments, and account management, reflecting EBL's commitment to digital banking leadership."

"Eastern Bank is known for its strong corporate governance, innovative digital banking solutions, and an inclusive work culture. I am particularly drawn to its structured MTO program which promises rapid professional growth and the opportunity to work with some of the best minds in the industry."

In 2024, EBL achieved a record profit after tax of BDT 7,504 million, representing a 23% growth compared to 2023. This was the first time the bank crossed the BDT 7 billion profit mark.

EBL maintains exceptional asset quality. While the industry NPL average in Bangladesh reached 20.20% by the end of 2024, EBL successfully kept its NPL ratio at a remarkably low 3.34%.

CRAB: EBL holds the highest possible local rating of "AAA" (long-term).
Moody's: It holds a "B2" international rating with a stable outlook (EBL was the first Bangladeshi bank to be rated by Moody's).

Yes. EBL maintains a robust Capital to Risk-Weighted Assets Ratio (CRAR) of 15.11%, which is well above the regulatory requirement of 12.50%.

EBL spent BDT 94.09 million on CSR in 2024. Strategically, EBL is "Green" focused; it was the first bank in Bangladesh to claim refinancing from the Central Bank for carbon credits.

• Accepting deposits
• Providing loans and advances
• Facilitating payments and settlements
• Foreign exchange services
• Trade finance

• Controls monetary policy
• Issues currency
• Regulates and supervises banks
• Maintains financial stability

• Objective: A commercial bank operates for profit, dealing directly with the public by accepting deposits and providing loans. The Central Bank operates for economic stability and does not deal directly with the general public.
• Authority: The Central Bank is the supreme regulatory authority that issues currency and oversees the monetary policy. Commercial banks follow the guidelines set by the central bank.
• Clientele: Central bank acts as the banker to the government and other banks. Commercial banks serve individuals and businesses.

CRR (Cash Reserve Ratio): It is the minimum percentage of a bank's total deposits that MUST be kept with the central bank in the form of liquid cash. Banks cannot use this money for lending or investment.

SLR (Statutory Liquidity Ratio): It is the minimum percentage of deposits that a commercial bank must maintain in the form of liquid cash, gold, or approved government securities before providing loans to customers.

Why change them? The central bank uses CRR and SLR to control liquidity (money supply) and inflation. If inflation is high, they increase CRR/SLR, leaving less money for banks to lend out, thus reducing spending. Conversely, during an economic slowdown, they decrease these ratios to inject more money into the economy.

Current Rates as of 2026:

It is the cost of borrowing money or the return on deposits, expressed as a percentage.

The difference between the interest earned on loans and the interest paid on deposits.

A loan where payment is overdue for 90 days or more.

• Reduce bank profit
• Increase risk
• Affect liquidity
• Damage reputation

Anti-Money Laundering—policies to prevent illegal money transactions.

Basel Accords are international banking regulations issued by the Basel Committee on Banking Supervision (BCBS) to ensure financial stability. They focus primarily on Capital Adequacy—ensuring banks have enough capital to meet obligations and absorb losses.

• Basel I (1988): Focused on Credit Risk. Established the 8% minimum capital-to-risk-weighted-assets ratio.
• Basel II (2004): Introduced three pillars: Minimum Capital Requirements, Supervisory Review, and Market Discipline. Expanded risk assessment to include Operational Risk.
• Basel III (2010/2013): Developed in response to the 2008 financial crisis. It significantly increased capital requirements and introduced Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) to ensure banks have enough liquid assets during stress.

In Bangladesh: Bangladesh Bank currently follows Basel III norms for commercial banks to maintain resilience.

Solvency: A bank's ability to meet its long-term debts and financial obligations. A solvent bank has total assets that are greater than its total liabilities.

Liquidity: A bank's ability to meet its short-term or immediate cash obligations (like customer withdrawals) effortlessly.

Tip: A bank can be solvent (assets > liabilities) but still face a liquidity crisis if all its assets are tied up in long-term loans and it doesn't have enough ready cash to pay customers.

Fund-based income: Interest from loans and advances.

Non-fund-based income: Fees, commissions (e.g., LC charges, service fees).

• Credit Risk: Risk of borrowers defaulting on loans.
• Market Risk: Risk of losses due to changes in market variables (e.g., interest rates, exchange rates).
• Liquidity Risk: Risk that a bank cannot meet its short-term financial obligations.
• Operational Risk: Risk of loss from inadequate or failed internal processes, people, and systems.

The rate at which the central bank lends money to commercial banks in the event of any shortfall of funds.

The rate at which the central bank borrows money from commercial banks within the country.

CAR is a measure of a bank's available capital expressed as a percentage of its risk-weighted credit exposure. It is used to protect depositors and promote stability and efficiency in financial systems around the world. It ensures that the bank has enough "cushion" to absorb a reasonable amount of losses before it becomes insolvent.

Formula: (Tier 1 Capital + Tier 2 Capital) / Risk Weighted Assets.

This is a classic Banking Dilemma. Both are essential, but they often work against each other:

• Liquidity is the ability to meet immediate obligations (like customer withdrawals). Without liquidity, a bank faces a "Bank Run" and immediate failure.
• Profitability is the ability to generate a surplus over expenses to grow and satisfy shareholders.

The Verdict: In the short term, Liquidity is more important because a bank can survive being unprofitable for a while, but it cannot survive one day without liquidity. However, in the long term, Profitability is necessary for sustainability.

Both are agreements to buy or sell an asset at a predetermined price on a future date:

• Forward Contract: A private, customizable agreement between two parties. It is Over-the-Counter (OTC) and carries higher default risk.
• Future Contract: A standardized contract traded on a formal exchange. It is regulated and has very low default risk due to clearinghouses.

A Currency Swap is a transaction in which two parties exchange principal and interest payments in different currencies. It is often used by banks and corporations to hedge against exchange rate risk or to obtain cheaper debt in a foreign currency.

The central bank adopts systematic actions to regulate the money supply, interest rates, and exchange rate in order to manage inflation under its monetary policy framework. Price stability is the ultimate goal of monetary policy for achieving high output growth and low unemployment. Financial markets and foreign exchange markets must be stable in order to achieve price and interest rate stability.

In practice, Open Market Operations (OMO) involve the buying and selling of government securities in the open market by the central bank in order to directly expand or contract the amount of money in the banking system.

Both are electronic fund transfer systems managed by Bangladesh Bank, but they differ in speed and volume:

• RTGS (Real Time Gross Settlement): Transactions are processed instantly on a one-to-one basis. It is used for high-value transfers (minimum 1 lakh BDT) and the settlement is continuous.
• BEFTN (Bangladesh Electronic Fund Transfer Network): Transactions are processed in batches throughout the day. It is used for low-to-medium-value transfers (salaries, utility bills, etc.) and there is no minimum amount. Settlement usually happens on the same or next business day.

Cheque: A negotiable instrument instructing a bank to pay a specific amount from the drawer's account. It can be dishonored if there is insufficient balance.

Demand Draft (DD): A pre-paid negotiable instrument issued by one bank branch and payable by any other branch of the same bank. It is safer than a cheque as it is pre-paid.

Pay Order (PO): Similar to a DD, but it is payable only by the issuing branch (locally). It is also pre-paid and guaranteed by the bank.

Key Difference: DD is used for inter-city/branch payments, while PO is used for local/intra-city payments within the issuing branch's jurisdiction.

It is a short-term money market where banks borrow and lend money to each other, typically for one day (overnight), to maintain their daily reserve requirements such as CRR.

A recognized international rating system used by supervisory authorities to evaluate banks. It stands for:
Capital adequacy
Asset quality
Management
Earnings
Liquidity
Sensitivity to market risk.

Islamic banking operates under Sharia law, which strictly prohibits the collection or payment of interest (Riba). Instead, it operates primarily on a profit-and-loss sharing (PLS) model for deposits and asset-backed transactions.

A written, unconditional order by one party (drawer) binding another party (drawee) to pay a fixed sum of money to a third party (payee) either on demand or at a predetermined date.

A financial instrument containing a written, unconditional promise by one party (the maker) to pay another party (the payee) a definite sum of money, either on demand or at a specified future date.

A legal order issued by a court directing a bank to freeze or attach funds in a customer's account to pay off a debt or judgment the customer owes to a third party (the creditor).

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. A SWIFT code is an international standard format for Business Identifier Codes (BIC) used to identify banks globally, primarily for international wire transfers.

A specialized banking division related to the creation of capital for companies and governments. Investment banks underwrite new debt and equity securities, aid in mergers and acquisitions (M&A), and provide strategic financial advisory services.

• Current Account: Primarily for businesses. Unlimited daily transactions, essentially no interest.
• Savings Account: For individuals to park savings. Earns modest interest, may have transaction limits.
• Fixed/Term Deposit (FDR): Money locked for a fixed period at a higher interest rate.
• Recurring/Deposit Pension Scheme (DPS): Regular monthly deposits resulting in a large sum at maturity.

London Interbank Offered Rate. It was historically the benchmark interest rate at which major global banks lent to one another. (Note: It has largely been phased out and replaced by alternative reference rates like SOFR, but remains a vital concept in banking history).

The interest rate at which short-term funds are borrowed and lent in the money market among banks, typically on an overnight basis to meet reserve requirements.

The standard interest rate at which the central bank (e.g. Bangladesh Bank) lends money to commercial banks, generally for long-term loans. (Unlike the Repo Rate which is for short-term liquidity management).

A fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). It has a defined term and usually pays a fixed or variable interest rate against the principal.

A type of long-term debt instrument that is not secured by physical assets or collateral, but relies purely on the general creditworthiness and reputation of the issuer (usually a corporation or government).

Bankers use the 5 C's of Credit to evaluate the creditworthiness of a borrower:

• Character: The borrower's reputation and track record (credit history).
• Capacity: Ability to repay the loan (income/cash flow analysis).
• Capital: The borrower's personal investment in the project/business.
• Collateral: Assets pledged as security for the loan.
• Conditions: External factors like the purpose of the loan, interest rates, and the overall economic environment.

ALM is a systematic tool used by banks to manage risks associated with mismatches between assets (loans/investments) and liabilities (deposits/borrowings).

Critical for stability because:

• Liquidity Management: Ensures the bank has enough cash to meet immediate withdrawal demands.
• Interest Rate Risk: Protects the bank's net interest margin if interest rates fluctuate.
• Maturity Transformation: Banks often 'borrow short' (deposits) and 'lend long' (loans); ALM ensures this mismatch doesn't lead to bankruptcy.

The financial sector in Bangladesh is primarily governed by the following key legislations:

• Bangladesh Bank Order, 1972: Established Bangladesh Bank as the central bank and defines its powers and functions.
• Bank Company Act, 1991: Regulates the licensing, management, and operations of all commercial banks in Bangladesh (amended in 2023).
• Financial Institutions Act, 1993: Governs non-banking financial institutions (NBFIs) or Finance Companies.
• Negotiable Instruments (NI) Act, 1881: Defines the legalities of cheques, promissory notes, and bills of exchange.
• Money Laundering Prevention Act, 2012: Provides the legal framework for preventing money laundering and terrorist financing.
• Artha Rin Adalat Ain, 2003: Special law for the speedy recovery of loans by financial institutions.
• Insurance Act, 2010: Governs the insurance industry and the operations of insurance companies.

Primary Market: Where new securities (stocks/bonds) are created and sold for the first time by the issuer (e.g., via an IPO or Initial Public Offering). The company receives the proceeds directly.

Secondary Market: Where previously issued securities are traded among investors (e.g., Dhaka Stock Exchange). The issuing company is not involved in these transactions, and the proceeds go to the selling investor.

A Yield Curve is a line that plots the interest rates (yields) of bonds having equal credit quality but differing maturity dates. It shows the relationship between the interest rate and the time to maturity.

Three Main Types:

• Normal Yield Curve: Long-term bonds have higher yields than short-term bonds (reflecting economic growth).
• Inverted Yield Curve: Short-term yields are higher than long-term yields (often a predictor of a recession).
• Flat Yield Curve: Short and long-term yields are very similar (indicates economic transition or uncertainty).

An LC is a financial document issued by a bank that guarantees a buyer's payment to a seller will be received on time and for the correct amount. If the buyer is unable to make payment, the bank is required to cover the full or remaining amount.

The four main parties are:

• Applicant (Importer/Buyer): The party requesting the LC.
• Beneficiary (Exporter/Seller): The party to whom the payment is guaranteed.
• Issuing Bank: The buyer's bank that issues the LC.
• Advising Bank: The seller's bank that verifies and communicates the LC to the exporter.

LIBOR (London Interbank Offered Rate): A benchmark interest rate that was formerly the global standard for pricing loans, based on estimates from major banks.

SOFR (Secured Overnight Financing Rate): The new benchmark that replaced LIBOR. Unlike LIBOR, which was based on bank "estimates," SOFR is based on actual transaction data in the US Treasury repo market, making it much more transparent and reliable.

The banking sector in Bangladesh is divided into Scheduled Banks (operate under full control of Bangladesh Bank via the 1972 Order/1991 Act) and Non-Scheduled Banks (established for special objectives, not fully performing all scheduled banking functions).

Currently, there are 62 Scheduled Banks categorized as:

• 6 State Owned Commercial Banks (SOCBs): Fully or majorly government-owned.
• 3 Specialized Banks (SDBs): Formed for objectives like agriculture/industry.
• 43 Private Commercial Banks (PCBs): Divided into 33 Conventional PCBs and 10 Islami Shariah-based PCBs.
• 1 Digital Commercial Bank: A new classification with no physical branches (pending operational launch).
• 9 Foreign Commercial Banks (FCBs): Branches of internationally incorporated banks.

Additionally, there are 5 Non-Scheduled Banks (Ansar VDP Unnayan Bank, Karmashangosthan Bank, Grameen Bank, Jubilee Bank, Palli Sanchay Bank).

Finance Companies (FCs): There are currently 35 FCs operating under the Finance Company Act 2023. Unlike banks, their funds primarily come from Term Deposits (3+ months), bank credits, call money, and bonds/securitization.

"Beyond its structure, the sector is undergoing rapid digital transformation, focusing heavily on mobile banking and financial inclusion."

"There are ongoing challenges such as non-performing loans (NPLs), liquidity constraints, and maintaining asset quality. However, forward-thinking institutions like Eastern Bank are actively addressing these through strong risk management frameworks and digital innovations."

Inflation decreases the purchasing power of money over time.

• Interest Rates: Central banks usually respond to high inflation by raising policy rates. This makes borrowing more expensive, which can reduce loan demand and slow down the economy.
• Real Returns: If inflation is higher than the interest rate offered on deposits, savers experience negative real returns. In extreme cases, this discouraged saving money in banks.
• Asset Quality: Prolonged high inflation increases business costs, which might lead to defaults on bank loans, thus increasing NPLs.

Foreign Exchange (Forex) Reserves are assets held by a central bank in foreign currencies (like USD, Euro). They are extremely important to a country's economic health.

They are used to:

• Pay for imports (fuel, raw materials, food).
• Back liabilities and build confidence in the national currency.
• Intervene in the foreign exchange market to stabilize the domestic currency value when it depreciates too fast against the US dollar.
• Pay foreign debts and obligations.

• High NPLs
• Governance issues
• Cybersecurity risks
• Digital transformation pressure

A general increase in prices and fall in the purchasing value of money over time.

• Demand-pull: When demand for goods overshadows supply.
• Cost-push: When production costs increase prices.
• Built-in inflation: When workers demand higher wages to keep up with living costs.

A general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy.

These are the two main types of macroeconomic policies used to manage the economy:

Actions taken by a central bank (like Bangladesh Bank) to influence the availability and cost of money and credit to help promote national economic goals.

The use of government revenue collection (taxes) and expenditure (spending) to influence a country's economy.

Monetary Policy Tools (Used by Central Bank):

• Interest Rates (Bank Rate/Repo Rate): Adjusting the cost of borrowing for banks.
• Open Market Operations (OMO): Buying or selling government securities to control money supply.
• Reserve Requirements (CRR/SLR): Changing the percentage of deposits banks must keep as reserves.
• Moral Suasion: Informal requests or guidance to banks.

Fiscal Policy Tools (Used by Government):

• Taxation: Increasing or decreasing taxes to influence consumer spending and business investment (e.g., Income tax, VAT).
• Government Spending: Spending on infrastructure, education, health, and welfare to stimulate the economy.
• Public Debt/Borrowing: Borrowing money (via bonds) to fund government expenses.
• Transfer Payments: Subsidies, pensions, and social safety net programs.

Lower interest rates encourage borrowing and investing, which stimulates economic growth but can cause inflation. Higher interest rates encourage saving and reduce borrowing/spending, which slows down inflation but can stall economic growth.

• Mounting Non-Performing Loans (NPLs)
• Capital shortfalls in several state-owned and private banks
• Corporate governance and regulatory enforcement challenges
• Liquidity stress in certain isolated financial institutions

Balance of Trade (BOT): Only records the difference between a country's export and import of visible goods (physical stuff like garments, oil, etc.).

Balance of Payments (BOP): A broader record that includes BOT plus invisible items (services like banking, tourism) and capital transfers (foreign investment, loans). BOP always balances in an accounting sense.

A systematic record of all economic transactions between the residents of a reporting country and residents of the rest of the world during a given period of time.

Both measure economic output, but they have different focuses:

• GDP (Gross Domestic Product): Measures the value of all goods and services produced within a country's borders, regardless of who produces them (e.g., a foreign company operating in Bangladesh contributes to Bangladesh's GDP).
• GNP (Gross National Product): Measures the value of all goods and services produced by a country's citizens and businesses, regardless of where they are located in the world (e.g., remittances from Bangladeshis abroad contribute to Bangladesh's GNP).

Key Difference: GDP is location-based, while GNP is ownership-based.

Bangla QR is the unified, interoperable Quick Response (QR) code standard introduced by Bangladesh Bank. It allows customers to make payments to any merchant using their preferred banking or MFS (Mobile Financial Services) app, regardless of which bank the merchant uses. It aims to build a "Cashless Bangladesh" by making digital payments accessible to small retailers and street vendors.

A state-owned investment fund comprised of money generated by the government, often derived from a country's surplus reserves, used to invest in real and financial assets to benefit the country's economy.

• Inflation Rate: Headline inflation has moderated slightly but remains "sticky" at around 8.7% (as of March 2026). While food inflation has dropped, non-food inflation (like transport and utilities) remains high.
• Forex Reserves: Currently stabilized at approximately $33.2 billion (as of early 2026), bolstered by record-high remittances ($30+ billion in the previous year).
• GDP Growth: Projected at 4.9% for 2026. This reflects a recovery period focused on stability rather than rapid expansion.

As of early 2026, the Governor of Bangladesh Bank is Md Mostaqur Rahman. His immediate predecessor was Dr. Ahsan H. Mansur.

Bancassurance is a partnership between a bank and an insurance company that allows the insurance company to sell its products to the bank's client base. It is a key modern banking trend to diversify income sources (non-fund-based income).

Life Insurance: A contract of guarantee against the risk of death or disability. It provides a fixed sum to the beneficiary. It serves as both protection and an investment/saving.

General Insurance: A contract of indemnity (compensation for actual loss) for assets like cars, houses, or cargo. It only pays if the loss actually occurs.

It is the core principle of general insurance which states that insurance is only to restore the insured to the same financial position they were in before the loss. The insured should not profit from a claim.

Takaful is a Shariah-compliant insurance system based on mutual cooperation (Ta'awun) and shared responsibility. Members contribute to a common fund to support each other against specified risks, avoiding interest (Riba) and gambling (Maysir).

A fundamental insurance principle where both parties (insurer and insured) must disclose all material facts honestly. Failure to disclose relevant info can make the policy void.

An Actuary is a highly skilled professional who uses mathematical and statistical methods to assess risk, calculate premiums, and ensure the long-term financial stability of an insurance company.

Reinsurance is insurance for insurance companies. It allows an insurer to transfer a portion of its risk portfolio to another insurer to reduce the likelihood of paying a large obligation resulting from an insurance claim.

The cash amount an insurance company pays to a policyholder if they decide to terminate the policy voluntarily before its maturity or the insured event occurs.