280 Questions
What is the most important activity of banks according to the given text?
Extending loans
What is the primary goal of banks when disbursing credit?
To contribute to economic development
What percentage of total assets of commercial banks of Bangladesh constitutes loans and advances?
65 percent
Why is effective management of loan quality crucial for banks?
To achieve a prudent risk-return mix
What is the primary source of revenue for banks?
Credit
What is the main risk associated with a bank's loan portfolio?
Risk of non-payment
What is essential for maintaining a good credit portfolio?
Well-defined credit policy
What is the ultimate goal of banks when managing credit risk?
To achieve a balance between risk and return
What is the main objective of an Internal Credit Risk Rating System?
To assess the quality of individual borrower
What happens if the wrong sector or industry is selected in the Internal Credit Risk Rating System?
The rating will not reflect the unique characteristics of the particular sector or industry
If a borrower has multiple lines of business, how should the sector be selected?
The sector should be selected based on the highest revenue-generating business
What should be done if no particular line of business can be singled out?
Use 'other industry-if manufacturing' or 'other service-if service'
Who has the authority to sanction or approve loans?
The Managing Director (MD) and Board of Directors (BOD)
What type of assets are Due from Affiliates classified as?
Non-Current Assets
What is the purpose of the Internal Credit Risk Rating System in credit selection?
To select individual credits and set credit pricing
What is the purpose of the Accumulated Depreciation account?
To decrease the value of Tangible Fixed Assets
What is the purpose of the Internal Credit Risk Rating System in credit pricing?
To set credit terms and conditions
What is the classification of Office Supplies in the balance sheet?
Current Assets
What is the characteristic of the Internal Credit Risk Rating System?
It is a fully automated credit risk scoring system
What is the purpose of the Retained Earnings account?
To record the company's profits
What type of liabilities are Short Term Bank Borrowings classified as?
Current Liabilities
What is the classification of Marketable Securities in the balance sheet?
Current Assets
What is the purpose of the Directors Loan (subordinated) account?
To record the loans provided by directors
What is the classification of Goods-in-transit in the balance sheet?
Current Assets
What is one of the benefits of a well-thought-out loan proposal?
It can significantly shorten turnaround time
What is the purpose of credit appraisal in selecting borrowers?
To select the right type of borrower and business
What is one of the aspects that the RM assesses during credit appraisal?
All of the above
What is the purpose of assessing the security offered by the customer?
To consider for credit decision
What is used to grade the borrower in case of large loans?
Credit Risk Grading Score Sheet (CRGS)
Who refers to External Credit Assessment Institution (ECAI) for credit rating?
Bank
What is one of the sources of inputs for decision making?
All of the above
What is the purpose of credit appraisal?
To assess the credit worthiness and risk profile of the borrower
What is the primary goal of borrower analysis?
To assess the creditworthiness of a borrower
What is the role of a credit officer in the borrower selection process?
To re-assess the borrower's position and ask for further clarification
What is a key consideration for a bank when selecting a borrower?
The industry and type of facilities required by the borrower
What does the bank do after being satisfied with the borrower's application?
Collects information from different sources, including CIB
What is the purpose of Figure 3.2.1?
To outline the borrower selection process
What is a crucial aspect of the borrower analysis?
Assessing the managerial and organizational aspects of the borrower
Why does a bank conduct borrower analysis?
To reduce the risk of loan default
What is the final stage of the borrower selection process?
Disbursing the loan to the selected borrower
What is the main source of earning and cash flow of a bank?
Credits
What is the organization of the manual defined by?
12 chapters
What is the consequence of credit failure to a bank?
Bank failure may occur
What is the name of the bank that the manual is specifically designed for?
NCC Bank Limited
What is the focus of Chapter 5 of the manual?
Analyzing the Financial Viability
What is the purpose of credit planning?
To ensure cash flow and earning
What is the primary focus of Chapter 3 of the manual?
Activities of Credit Operations
How many chapters does the manual have, including introduction?
12
What is the primary objective of a credit appraisal exercise?
To justify the soundness of an investment proposal
What are the various aspects of credit appraisal?
Financial, Technical, Socio-Economic, and Environmental
What is the purpose of evaluating the managerial aspect of a credit proposal?
To assess the competence of the management team
What is the ultimate goal of a feasibility study?
To evaluate the commercial viability of a project
What is the importance of evaluating the socio-economic aspect of a credit proposal?
To assess the environmental impact of a project
What is the role of a credit appraisal report?
To provide a detailed analysis of the investment proposal
What is the primary focus of a credit appraisal exercise?
To justify the soundness of the investment proposal
What is the importance of evaluating the financial viability of a project?
To determine the financial viability of a project
What is the reason behind the financial sector's inability to comply with the implementation deadline?
Difficulty in applying environmental disciplines
Why do banks perceive environmental hazards as a risk to their business?
Due to indirect costs and credit risks associated with environmentally deteriorated clients
What is the consequence of lending to clients affected by environmental degradation?
Additional credit risk for the bank
What does the Gross Margin ratio measure?
Profitability of sales
What is the rule of thumb for the Operating Profit Margin ratio?
20% to 25% is better
What is the purpose of the Guidelines on Environmental Risk Management?
To support Policy Guidelines for Green Banking
What does the Return on Assets ratio measure?
Profitability of investments
What is the indirect cost to banks associated with environmental degradation?
Credit risk and additional losses in the event of default
Why do banks need to assess environmental risks?
To minimize their credit risk
What is the rule of thumb for the SG&A ratio?
Lower is better
What does the Return on Equity ratio measure?
Earning power on shareholders' equity
What does a negative net operating cash flow indicate?
Unfavorable business conditions
When did the Bangladesh Bank circulate the Guidelines on Environmental Risk Management?
January 30, 2011
What is the impact of environmental problems on the value of real estate?
It diminishes the value of the property
What is the purpose of the Depreciation ratio?
To measure the effect of depreciation on sales
What should a credit analyst do when evaluating a company's negative net operating cash flows?
Evaluate each possible explanation to discover the economic forces responsible
What does the Net Margin ratio measure?
Profitability of sales
What does a positive net investing cash flow indicate?
Disinvestment in productive assets
Why should a credit analyst investigate a company's capital expenditures?
To evaluate the company's investment in productive assets
What is the rule of thumb for the Dividend Payout Rate ratio?
Lower is better
What happens when a firm increases its investment in productive assets?
The firm's production and sales increase
What is the result of higher surplus from operating activities?
Higher ability to repay
What is the importance of evaluating the quality of investment made by a firm?
To evaluate the firm's investment in productive assets
What is the relationship between investment in productive assets and surplus from operating activities?
Direct relationship
What does the Sales to Total Assets ratio indicate?
The efficiency of assets in generating sales
What is the rule of thumb for the Inventory in Days ratio?
Lower is better
What does the Current Ratio measure?
The ability to pay off short-term obligations with current assets
What is the purpose of the Quick Ratio?
To measure a company's ability to meet current debts with most liquid assets
What is the rule of thumb for the Working Capital Components ratio?
Higher is better
What is the primary concern of a short-term creditor, such as a bank, when evaluating the financial health of a borrower?
Liquidity of the borrower
What do financial statements reveal about a company's performance?
Results of prior management decisions
Which of the following is NOT a dimension of financial health evaluated in financial statement analysis?
Market share
What is the primary focus of a long-term creditor, such as a bondholder, when evaluating a company's financial health?
Profitability and solvency
What is the purpose of financial statement analysis in the context of credit evaluation?
To assess the creditworthiness of a borrower
What is the primary purpose of financial ratio analysis in evaluating the financial performance of a firm?
To identify the financial strength and weakness of a firm
Which type of ratio measures the company's potentiality and performance?
Growth Ratio
What can be inferred from a low profit margin ratio?
The company has high fixed costs
What is the purpose of analyzing various ratios in financial statement analysis?
To identify areas of improvement in the company's operations
What does a high debt-to-equity ratio indicate about a company's capital structure?
The company has a high level of financial leverage
What does the interest coverage ratio primarily measure?
A company's ability to generate cash to pay interest expenses
Which of the following ratios measures the average number of days receivables are outstanding before being collected?
Receivable in Days
What is the implication of a debt service coverage ratio that is less than one?
The company is unable to service its debt obligations
Which of the following is an example of an activity ratio?
Receivable in Days
What is the rule of thumb for the debt service coverage ratio?
Must be greater than one
What is a possible implication of a positive net financing cash flow resulting from an increase in equity capital?
The firm is managing its debt-equity ratio efficiently
Which of the following cash flow profiles would indicate a firm's need for new bank finance for capital expenditure?
Negative net operating cash flow and negative net financing cash flow
What is a possible consequence of excessive borrowing, as indicated by a positive net financing cash flow?
Adverse impact on debt-equity ratio and debt servicing capacity
What is a possible interpretation of a negative net financing cash flow?
The firm has repaid its existing loans or distributed dividends
Which of the following is a key consideration for a credit analyst when evaluating a firm's cash flow profile?
All of the above
What is the primary objective of marketing analysis in the context of a project?
To estimate the market share of the project under appraisal
What is the key analytical tool used in industry analysis to identify the competitive forces?
Porter's five forces model
What aspect of the market does marketing analysis focus on?
Company's external or macro-environment
What is the main objective of industry analysis?
To identify the main sources of competitive forces
What does marketing analysis provide information about?
Consumer behavior, intentions, attitudes, and preferences
What is the focus of marketing analysis in the context of a project?
All of the above
What is the primary consideration in marketing analysis?
Company's external or macro-environment
What does marketing analysis help to identify?
The main sources of competitive forces
What is the outcome of marketing analysis?
Estimation of the market share of the project
What is the focus of industry analysis in the context of a project?
Identifying the main sources of competitive forces
What is the primary objective of analyzing a firm's cash flow statement?
To analyze the firm's investment and financing activities
What does a high Total Liability to Net Worth ratio indicate?
Higher debt financing and lower lender protection
What is the primary focus of liquidity analysis?
Analyzing a firm's ability to meet short-term obligations
What is the impact of a high debt ratio on a firm's financial leverage?
It increases the firm's financial leverage
What is the primary purpose of financial ratio analysis?
To evaluate a firm's financial performance and position
What type of cash inflow is generated from borrowing?
Financing cash inflow
What is the purpose of adjusting for non-operating losses or gains in the cash flow statement?
To determine the cash flow from operating activities
What is the impact of a decrease in accounts receivable on the cash flow statement?
It increases the cash flow from operating activities
What is the primary focus of liquidity analysis?
Assessing the company's ability to pay its short-term debts
What is the purpose of preparing a cash flow statement?
To provide information about a company's inflows and outflows of cash
What does a negative net operating cash flow indicate?
The company has increased its inventory and account receivable
What is the purpose of analyzing the cash flow from operating activities in a cash flow statement?
To assess the company's economic viability
What is the cash flow from investing activities mainly used for?
To purchase new equipment
What is the purpose of preparing a cash flow statement?
To assess the company's ability to generate cash
What is the net cash flow from operating activities calculated by?
Adding cash sales, collection from credit sales, and subtracting payment for operating expenses and payment for purchases
What is the purpose of Cash Flow from Financing Activities?
To identify the sources and uses of a company's funds
What is the effect of a decrease in Long-term Loans/Bonds Payable on Cash Flow from Financing Activities?
It decreases the Cash Flow from Financing Activities
What is the purpose of Net C/F from Operating, Investing & Financing Activities?
To determine the change in a company's cash balance
What is the effect of an increase in Property, Plant & Equipment on Cash Flow from Investing Activities?
It decreases the Cash Flow from Investing Activities
What is the purpose of Opening Cash & Bank Balance in the Cash Flow Statement?
To determine the company's cash balance at the beginning of the period
What does a positive net financing cash flow indicate if it is a result of increase in equity capital?
The firm is managing its debt-equity ratio efficiently
What is the main purpose of cash flow from investing activities?
To purchase fixed assets and investments
What is the primary objective of analyzing a firm's cash flow statement?
To identify the firm's ability to generate cash from its operations
What does a negative net financing cash flow indicate?
The firm has repaid its existing loans
What type of cash inflows is included in cash flow from operations?
From sale of goods and services
What is the focus of financial ratio analysis in the context of credit evaluation?
To analyze the firm's financial performance and position
What is the primary focus of liquidity analysis?
Evaluating the ability of a company to pay its short-term debts
What should a credit analyst do when evaluating a company's cash flow profile?
Analyze the cash flow from all three activities: operating, investing, and financing
What type of cash outflows is included in cash flow from operations?
To pay suppliers for inventory
What is the primary purpose of preparing a cash flow statement?
To provide information about a company's inflows and outflows of cash
What is the total amount of liabilities and equity as of December 31, 2019?
Tk. 283,500
What is the net income for the year ended December 31, 2019?
Tk. 21,000
What is the amount of cash dividends declared and paid during the year ended December 31, 2019?
Tk. 8,500
What is the cost of additional equipment purchased during the year ended December 31, 2019?
Tk. 60,000
What is the amount of plant assets sold during the year ended December 31, 2019?
Tk. 62,500
What is the total amount of assets as of December 31, 2019?
Tk. 283,500
What is the gain on sale of plant assets during the year ended December 31, 2019?
Tk. 2,500
What is the total amount of revenues and gains for the year ended December 31, 2019?
Tk. 602,500
What is the depreciation expense for the year ended December 31, 2019?
Tk. 7,500
What is the total amount of expenses for the year ended December 31, 2019?
Tk. 581,500
What does a company's ability to generate future net cash inflows from operations help to pay?
Debts, interest, and dividends
What is one of the reasons for differences between net income and net cash flow from operating activities?
Cash and non-cash transactions
What is the primary categorization of activities in a statement of cash flows?
Operating, investing, and financing
What is the purpose of analyzing a company's cash flow statement?
To determine a company's liquidity
What is the focus of liquidity analysis in the context of financial statement analysis?
A company's liquidity
What is the primary concern of a long-term creditor, such as a bondholder, when evaluating the financial health of a borrower?
Profitability and solvency
What does financial statement analysis reveal about a company's past performance and current financial position?
Significant relationships between data and trends in those data
What is the main purpose of analyzing a company's financial statements?
To obtain useful information about the company's financial health
What is the primary focus of liquidity analysis?
A company's ability to pay its short-term debts
What do financial statements provide information about?
A company's financial health and performance
What is the primary objective of financial ratio analysis in evaluating the financial performance of a firm?
To assess the firm's potentiality and performance
What type of ratio measures the company's potentiality and performance?
Growth Ratio
What is the purpose of ratio analysis in financial statement analysis?
To identify the firm's financial strengths and weaknesses
What is the benefit of using ratio analysis in financial statement analysis?
It provides a clear understanding of the firm's financial condition
What can be identified through ratio analysis in financial statement analysis?
The firm's financial strengths and weaknesses
What is the main purpose of preparing a statement of cash flows?
To assess a company's ability to generate future net cash inflows
What is the primary focus of financial appraisal in a project?
Both commercial profitability and national profitability considerations
What is the primary categorization of activities in a statement of cash flows?
Operating, investing, and financing activities
What does a statement of cash flows help financial managers/bankers to identify?
A company's need for external financing
What is the purpose of analyzing a cash flow statement?
To assess the cash flow generation of a project
What is the primary objective of liquidity analysis?
To determine the liquidity of a project
What is the importance of evaluating the statement of cash flows?
To evaluate a company's liquidity and solvency
What does the statement of cash flows reveal about a company?
The company's liquidity and solvency
What is the purpose of preparing projected financial statements?
To forecast the future financial performance of a project
What is the primary focus of cost-volume-profit analysis?
To assess the relationship between cost, volume, and profit
What would a credit analyst analyze to understand how efficiently a firm is managing a tradeoff between tax advantages and bankruptcy costs?
Debt Servicing Capacity
What is a possible implication of a positive net financing cash flow resulting from an increase in equity capital?
The firm is experiencing growth opportunities
What does a negative net financing cash flow indicate?
The firm has repaid existing loans
What is the impact of excessive borrowing on a firm's financial health?
It increases the firm's debt-equity ratio and adversely affects its debt servicing capacity
What should be considered in line with business strategy and growth opportunities?
Capital expenditure planning
What type of liabilities are Term Loan classified as?
Long-term Liabilities
What is the primary purpose of Cash Flow from Operating Activities in a Cash Flow Statement?
To show the net change in cash and cash equivalents from operating activities
What is the classification of Office Supplies in the Balance Sheet?
Current Assets
What is the purpose of Retained Earnings in the Balance Sheet?
To show the company's accumulated profits
What type of analysis is used to evaluate a company's liquidity position?
Liquidity Analysis
What is the primary focus of leverage ratios?
Evaluating a firm's financial leverage
What does a high Total Liability to Net Worth ratio indicate?
Higher financial leverage
What is the purpose of a cash flow statement?
To summarize a firm's cash inflows and outflows
What is the focus of liquidity analysis?
Assessing a firm's liquidity
What is the purpose of financial statement analysis?
To analyze a firm's financial position and performance
What does a leverage ratio measure?
A firm's financial leverage
What is the purpose of cash flow statement analysis?
To analyze a firm's cash inflows and outflows
What is the focus of financial ratio analysis?
Analyzing a firm's financial position and performance
What does a high debt ratio indicate?
Higher financial leverage
What is the primary purpose of leverage ratios?
To measure a firm's financial leverage
What is one of the reasons why the project failed according to the case study?
Ill motive and ill behavior of the borrower
What was M/s Emerald Oil Industries Ltd. pioneer in doing?
Extracting edible oil from rice bran
Why were banks not allowing the borrower to open a Back-to-Back L/C?
Due to failure of payment of overdue loans
What is one of the factors that led to the failure of the project?
Tendency for over borrowing by exaggerating project cost
What was the borrower's behavior described as in the case study?
Short-sighted and temporary
What is the primary consideration for a bank when finalizing the loan structure?
The financial feasibility of the project
What is the purpose of analyzing the financial statements of a client?
To determine the creditworthiness of the client
What is the final stage of the borrower selection process?
Disbursement of the loan
What is the primary focus of the bank when evaluating a client's financial statements?
The creditworthiness of the client
What is the purpose of considering the socio-economic aspect of a project?
To assess the potential impact of the project on the environment and society
What is the primary objective of a loan proposal?
To provide a proxy for a credit submission within the financial institution
What should the content of a loan proposal progressively build during the preparation process?
A brief, well-argued financing case
What questions should a loan proposal writer constantly ask themselves during the preparation process?
What, Why, and How
What should a loan proposal provide to the lender?
A good understanding of the business or group
What should the structure of a loan proposal contain?
Purpose of the credit, background of the business, details of the existing and proposed facilities and securities, ownership structure, management, overview of the business/project, financial analysis, debt service/repayment/security, and summary & recommendations
What is the total amount of loan sanctioned in favor of Rahman Knitting and Yarn Processing Ltd in 1992?
TK. 41.795 million
What is the purpose of the Bangladesh Bank's direction to the bank regarding the loan account?
To recover the overdue loan
What is the current status of the sweater unit of the project?
It is not running
What is the borrower's reason for not being able to repay the loan installment?
Insufficient cash generation
What was the purpose of the additional loan of TK. 45.118 million disbursed in 2004?
To balance the project properly
What is JMI Syringes and Medical Devices Ltd. primarily known for in Bangladesh?
Manufacturing of Auto Disable (AD) Syringe
What is the total cost of the JMI Syringes and Medical Devices Ltd. project?
BDT 500 million
What is the status of JMI Syringes and Medical Devices Ltd. currently?
Public Limited Company
Which of the following organizations has accredited JMI Syringes and Medical Devices Ltd.?
WHO and GVI
Which countries does JMI Syringes and Medical Devices Ltd. export its products to?
Singapore, Thailand, Myanmar, Spain, Portugal, and other different countries of Asia and Latin America
What is indicated by a positive net financing cash flow, if it is the result of an increase in equity capital?
Good financial health
What does a negative net financing cash flow indicate?
Repayment of existing loans or dividend payment
What is important for a credit analyst to understand when analyzing cash flows?
Tradeoff between Tax Advantages and bankruptcy cost from increased debt
What should be taken into consideration regarding capital expenditure?
Consistency with business strategy and growth opportunities
What is essential to understand in analyzing cash flows from financing activities?
Efficient management of tradeoff between Tax Advantages and bankruptcy cost
What is the purpose of financial appraisal in a project?
To evaluate the profitability of the project
What is the primary consideration in evaluating national or socio-economic benefits of a project?
National profitability or socio-economic benefits
What is the purpose of cash flow statement analysis in financial appraisal?
To analyze the cash inflows and outflows of the project
What is the focus of cost-volume-profit analysis in financial appraisal?
To analyze the relationship between cost, volume, and profit
What is the purpose of sensitivity analysis in financial appraisal?
To analyze the impact of changes in variables on project profitability
What is the purpose of capital budgeting techniques in financial appraisal?
To evaluate the feasibility of different investment options
What is the focus of Working Capital Requirement assessment in financial appraisal?
To determine the working capital required to meet the project's financial obligations
What is the purpose of assessing the cost of the project in financial appraisal?
To determine the total cost of the project, including financing costs
What is the focus of financial projection and preparation of projected financial statements in financial appraisal?
To prepare projected financial statements to evaluate the project's financial performance
What is the purpose of analysis of income statement and balance sheet in financial appraisal?
To analyze the financial performance of the project
What is the primary purpose of conducting credit assessment on a group of companies?
To determine the obligor's creditworthiness
What is the role of the RM in the credit approval process?
To recommend the loan application for approval
What is the primary objective of the Internal Credit Risk Rating System?
To provide a granular, objective, and transparent framework for credit risk assessment
What is the purpose of the credit risk rating derived from the ICRRS?
To assess the credit risk and make informed decisions
What is the role of participatory banks in loan syndication?
To perform independent analysis and review of the loan terms
What is the primary responsibility of the Recovery Unit in each bank?
To determine recovery strategy and pursue all options to maximize recovery
Who is responsible for approving the Classified Loan Review Report for NPLs up to a certain percentage of the bank's capital?
The Head of Credit
What is the purpose of the Classified Loan Review Report?
To review all documents and meet the customer
What is the primary focus of the Credit Recovery Unit in managing Non-Performing Loans?
To maximize recovery and ensure timely loan loss provisioning
What is the role of the Account Manager in the Credit Recovery Unit?
To coordinate and administer the action plan and serve as the primary customer contact
What should be done as a last resort to recover credit from defaulted borrowers?
Taking legal action against the defaulted borrower
What is the purpose of the Credit Risk Grading (CRG) in the credit appraisal process?
To determine the creditworthiness of the borrower
What document is issued by the Credit Administration after credit approval?
Offer Letter
Who is responsible for monitoring and recovering Non-Performing Loans (NPLs)?
Recovery Unit (RU)
What is the purpose of the Internal Credit Risk Rating System (ICRRS)?
To classify loans into different risk categories
What is the primary responsibility of the Credit Administration Department (CAD) after ensuring full compliance with the terms and conditions of approval?
To disburse the loan amount
What is the purpose of the Loan Documentation Check List (LDCL) completed by the Relation Manager (RM)?
To document the credit approval process
What is the primary focus of the Credit Administration Department (CAD) in relation to security documentations?
To ensure appropriate coverage in place over assets pledged as collateral
What is the next step after the customer agrees with the terms and conditions incorporated in the offer letter?
The RM completes the Loan Documentation Check List (LDCL)
What is the primary responsibility of the Relation Manager (RM) in the credit administration process?
To complete the Loan Documentation Check List (LDCL)
What is the purpose of scrutinizing the loan application?
To collect all required information from different parties including Credit Information Bureau (CIB) report
What is the significance of credit investigation?
To prevent bad credits
What is the primary concern of the banker before sanctioning credit?
Ensuring repayment
What is the focus of the credit process?
Selecting good borrowers
What is the objective of credit risk management?
To minimize bad credits
What is the primary purpose of the procedural guidelines in a bank's credit operation?
To outline the sequence of activities associated with credit operations
What is the primary role of the Relationship Management (RM) in a bank's credit operation?
To act as a primary bank contact with a borrower
What is the primary focus of the credit committee/CRM in a bank's credit operation?
To approve and disburse loan proposals
What is the primary purpose of the credit budget in a bank's credit operation?
To determine the amount of credit to be sanctioned and disbursed
What is the primary focus of the credit operations in a bank?
To start with discussion between the bank and client and end with adjustment and/or recovery of loan
What is the primary purpose of the Credit Risk Manual given by Bangladesh Bank?
To prepare the procedural guidelines for credit operations
What is the primary role of the head office in a bank's credit operation?
To prepare the credit budget for different areas and categories
What is the primary purpose of the centralized credit operations in a bank?
To start with discussion between the bank and client and end with adjustment and/or recovery of loan
What is the primary focus of the credit analysis in a bank's credit operation?
To evaluate the creditworthiness of a borrower
What is the primary purpose of the credit appraisal exercise in a bank's credit operation?
To evaluate the creditworthiness of a borrower
What is the primary objective of Internal Credit Risk Rating System (ICRRS)?
To assess the quality of individual borrower to help the banks to determine the quality of the credit portfolio
Who is responsible for sanctioning/approving loans?
All of the above
What should be used to assess the line of business generating the highest portion of the revenue and/or profit?
The sector or industry selected from the dropdown list
What should be used if the borrower is in multiple lines of business and no particular line of business can be singled out?
"Other industry- if manufacturing" or "other service-if service"
What is the primary function of Internal Credit Risk Rating System (ICRRS)?
To calibrate the characteristics of different sectors and industries in one single model
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