<<12345678910111213141516171819202122232425>> 1. Which of the following is not a purpose of credit monitoring?To ensure end use of the funds by the borrowerTo detect any deterioration in the security charged to the bankTo comply with the guidelines of the RBITo ascertain that the business continues to run on the projected linesQuestion 1 of 25 2. Which of the following is not a tool available to the bank for credit monitoring?Sending regular reminders to the borrowerPeriodic visits to the business place for inspectionAnalysis of financial statementsExamine conduct of borrower's accountQuestion 2 of 25 3. Which of the following is not a method of detecting wrong mention of inventory in a stock statement?Stock auditInspection of stocksAnalysis of financial statementsCross-check from the balance sheet figureQuestion 3 of 25 4. Which of the following is not a method of detecting wrong mention of receivables in statement submitted by the borrower?Analysis of financial statementsCross check from the balance sheet figureReceivables auditInspection of books of accountQuestion 4 of 25 5. Which of the following is not a danger sign about the direction of business of the borrower?Devolvement of ICs, invocation of Bank GuaranteesDemand for higher limitDelays in submission of stock/receivables statementsReturn of cheques/billsQuestion 5 of 25 6. Which of the following is not an unsatisfactory sign in conduct of the account of the borrower?Delay in payment of interest/instalmentsrouting of transactions with some other bankFrequent over drawingsHigh turnoverQuestion 6 of 25 7. Which of the following is not the purpose of credit audit?Improvement in the quality of credit portfolioReview sanction process and compliance status of large loansFeedback on regulatory complianceStock inspectionQuestion 7 of 25 8. Purpose of appointing bank's nominee on company's board of borrowing company is:To keep a tab on the important decisions of the boardTo be a part of the managementTo guide the company for better workingTo safeguard the securities charged to the bankQuestion 8 of 25 9. What is the primary purpose of credit control and monitoring in lending?To increase the bank's profitsTo ensure the borrower's compliance with the terms of the loanTo detect and prevent any diversion of bank fundsTo facilitate the borrower's expansion of businessQuestion 9 of 25 10. What is the role of credit control and monitoring if there is a deterioration in the borrower's business?Take harsh action immediatelyInitiate appropriate action to ensure the business continues to run on viable linesIncrease the loan amount to help the businessIgnore the deterioration and hope for the bestQuestion 10 of 25 11. Why is early detection of business deterioration important for the bank?To increase the chances of recoveryTo reduce the bank's profitsTo facilitate the borrower's expansion plansTo delay necessary action by the bankQuestion 11 of 25 12. What action might a bank take if there is continued deterioration in the borrower's business despite appropriate measures?Increase the loan amountRecall the advance or seize the securityProvide additional funds without any conditionsIgnore the situation and hope for improvementQuestion 12 of 25 13. What is one of the reasons banks conduct periodic visits and inspections of borrower enterprises?To interfere with the borrower's operationsTo determine the financial health of the borrowerTo increase the borrower's operational costsTo limit the borrower's activitiesQuestion 13 of 25 14. Which of the following is NOT a method used by banks for credit monitoring?Conduct of the Accounts with the BankMonthly statements submitted by the borrowerStock/Receivables AuctionFinancial Statements of the Business, Auditors' ReportQuestion 14 of 25 15. What is the role of credit audit in credit monitoring?To increase the bank's profitsTo determine the borrower's creditworthinessTo examine compliance with bank's credit processes and proceduresTo interfere with the borrower's business operationsQuestion 15 of 25 16. What is one of the objectives of Credit Audit?Increasing the number of loans disbursedReviewing financial statements of borrowersProviding feedback on regulatory complianceGenerating revenue for the bankQuestion 16 of 25 17. Which department is typically responsible for overseeing the credit audit/loan review mechanism?Marketing DepartmentHuman Resources DepartmentCredit Audit DepartmentFinance DepartmentQuestion 17 of 25 18. What is one of the functions of the Credit Audit Department?Marketing new loan productsAnalyzing customer feedbackFollowing up with controlling authoritiesManaging employee benefitsQuestion 18 of 25 19. What does the Credit Audit Department do with the responses received regarding Credit Audit Reports?Discard themKeep them for future referenceAnalyze and process themSend them to competitorsQuestion 19 of 25 20. What is one of the key areas of focus for credit audit besides reviewing individual accounts?Marketing strategiesLoan disbursement proceduresPortfolio reviewEmployee training programsQuestion 20 of 25 21. How often should credit review be conducted, according to the provided text?Annually for all accountsEvery six months for all accountsDepending on the risk level of the accountEvery three years for all accountsQuestion 21 of 25 22. What is the main purpose of conducting credit audits on site?To visit borrowers' factory/office premisesTo gather information on competitorsTo assess the conduct of accounts at the branchTo provide training to branch staffQuestion 22 of 25 23. What action points are typically included in the credit audit process?Reviewing marketing strategiesVerifying regulatory compliance and documentation adequacyConducting employee performance evaluationsAssessing shareholder satisfactionQuestion 23 of 25 24. What is the threshold for subjecting title deeds and other documents to periodic legal audit and re-verification?Rs. 1 croreRs. 5 croresRs. 10 croresRs. 50 lakhsQuestion 24 of 25 25. What is the purpose of conducting periodic legal audits and re-verifications of title deeds for credit exposures?To ensure compliance with RBI regulationsTo identify any discrepancies or issues with the title documentsTo determine the creditworthiness of borrowersTo monitor the utilization of funds by borrowersQuestion 25 of 25 Loading...
