Recent

  • Show all results for ""

🎧 New: AI-Generated Podcasts Turn your study notes into engaging audio conversations. Learn more

Credit Operations and Risk Management
400 Questions
0 Views

Credit Operations and Risk Management

Created by
@StunnedVoice

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What percentage of capital should the CLR's for NPLs be approved by the MD/CEO?

  • 25% (correct)
  • 20%
  • 10%
  • 50%

    • What is the purpose of introducing an incentive program for RU?

  • To punish defaulted borrowers
  • To reward the MD/CEO
  • To encourage RU to bring down the NPLs (correct)
  • To increase the number of NPLs

    • What is the last resort to recover credit from a defaulted borrower?

  • Sending a warning letter
  • Taking legal action (correct)
  • Offering a settlement
  • Writing off the loan

    • What is the role of RM in the credit operations process?

    <p>To discuss with clients and receive requests for credit</p> Signup and view all the answers

    What is the purpose of Credit Risk Grading (CRG)?

    <p>To evaluate the creditworthiness of the borrower</p> Signup and view all the answers

    What is the role of CAD in the credit operations process?

    <p>To collect CIB reports and issue offer letters</p> Signup and view all the answers

    What happens to substandard (SS) or worse accounts?

    <p>They are transferred to RU</p> Signup and view all the answers

    What is the purpose of the Early Alert Process?

    <p>To identify potential NPLs</p> Signup and view all the answers

    What is the primary goal of analyzing the aggregate demand of a proposed product or service?

    <p>To forecast future demand of the product</p> Signup and view all the answers

    What is the purpose of analyzing the company's external or macro-environment?

    <p>To assess the competitive forces in the industry</p> Signup and view all the answers

    What is the primary objective of industry analysis?

    <p>To identify the main sources of competitive forces</p> Signup and view all the answers

    What is the key analytical tool used in industry analysis?

    <p>Porter's five forces model of competition</p> Signup and view all the answers

    What is one of the factors considered in analyzing the market?

    <p>Consumer behavior and intentions</p> Signup and view all the answers

    What is one of the components of the company's internal or micro-environment?

    <p>Resource strengths and weaknesses</p> Signup and view all the answers

    What is the purpose of estimating the project's market share?

    <p>To determine the project's competitiveness in the market</p> Signup and view all the answers

    What is one of the aspects of marketing analysis?

    <p>Analyzing the structure of the competition</p> Signup and view all the answers

    What was introduced in 2011 to minimize environmental risk?

    <p>Guideline for environment risk management</p> Signup and view all the answers

    What is the purpose of the environmental due diligence checklist?

    <p>To measure environmental risk</p> Signup and view all the answers

    What should banks do with high rated projects according to the ERM guideline?

    <p>Place them to the Board for approval</p> Signup and view all the answers

    Why do banks need to establish a database of NPLs due to environmental reasons?

    <p>To report annually</p> Signup and view all the answers

    What is the frequency of reporting required by the ERM guideline?

    <p>Annually</p> Signup and view all the answers

    What aspect of a project is very important for assessing its feasibility?

    <p>Marketing</p> Signup and view all the answers

    What is the purpose of evaluating technical feasibility of a project?

    <p>To identify potential technical issues</p> Signup and view all the answers

    Why is socio-economic aspect considered while assessing the viability of a project?

    <p>To determine the project's impact on the community</p> Signup and view all the answers

    What is the primary output of the project?

    <p>Solar Panel</p> Signup and view all the answers

    What is the main competitive strength of Bangladesh in producing solar power?

    <p>Abundant sunlight</p> Signup and view all the answers

    What is one of the government policies supporting the project?

    <p>Installation of solar system to avail new electric line</p> Signup and view all the answers

    What is the project pioneering in?

    <p>Supplying solar panels commercially</p> Signup and view all the answers

    What is one of the opportunities for the project?

    <p>Huge area of the country is still uncovered from electric supply</p> Signup and view all the answers

    What is one of the benefits of the project?

    <p>Providing eco-friendly and hazard free power at a competitive price</p> Signup and view all the answers

    What is essential for the project's success?

    <p>Marketing strategy and awareness of the people</p> Signup and view all the answers

    What type of project is M/s.Beneco Solar Energy Ltd.?

    <p>Non-traditional project</p> Signup and view all the answers

    What is the total cost of goods manufactured in 2019?

    <p>1112,000</p> Signup and view all the answers

    What is the closing stock of finished goods in 2018?

    <p>40,000</p> Signup and view all the answers

    What is the raw materials used in 2017?

    <p>598,000</p> Signup and view all the answers

    What is the cost of goods sold in 2017?

    <p>965,000</p> Signup and view all the answers

    What is the opening stock of work-in-process in 2018?

    <p>12,000</p> Signup and view all the answers

    What is the manufacturing cost in 2019?

    <p>496,000</p> Signup and view all the answers

    What is the cost of goods available for sales in 2018?

    <p>1032,000</p> Signup and view all the answers

    What is the closing stock of raw materials in 2019?

    <p>10,000</p> Signup and view all the answers

    What percentage of the total assets of all commercial banks of Bangladesh is comprised of loans and advances?

    <p>65 percent</p> Signup and view all the answers

    What is the significant revenue generating source of banks?

    <p>Credit</p> Signup and view all the answers

    What is the primary objective of managing credit portfolio?

    <p>To achieve a balance between risk and return</p> Signup and view all the answers

    What is the primary goal of disbursing quality credit to all types of business and segments of the population?

    <p>To promote economic development</p> Signup and view all the answers

    What is the single most potentially devastating risk that arises from the loan portfolio of banks?

    <p>Risk of non-payment by borrowers</p> Signup and view all the answers

    What is essential for maintaining a good credit portfolio?

    <p>A well-defined credit policy</p> Signup and view all the answers

    Why is it important for banks to have a well-defined credit policy?

    <p>To minimize risk and ensure a good credit portfolio</p> Signup and view all the answers

    What is the primary objective of banks in their lending activities?

    <p>To promote economic development</p> Signup and view all the answers

    What is the total demand for oil consumption in the country?

    <p>18 lac MT</p> Signup and view all the answers

    What is the production capacity of M/s. Emerald Oil Industries Ltd.?

    <p>15,000 MT/year</p> Signup and view all the answers

    What are the advantages of rice bran oil over its substitute products?

    <p>Nutritionally superior, more micronutrients</p> Signup and view all the answers

    Who are the target customers for the project?

    <p>Rural and urban residential and commercial users, food processing industrial sector</p> Signup and view all the answers

    What is the brand name under which the project's products are manufactured and supplied?

    <p>Spondon</p> Signup and view all the answers

    What is the purpose of Cash Flow from Operations?

    <p>To measure the cash inflows and outflows related to a company's core operations</p> Signup and view all the answers

    What is the project's plan for its products in the near future?

    <p>To export its products abroad</p> Signup and view all the answers

    What is an example of Cash Inflows in Cash Flow from Operations?

    <p>From sale of goods and services</p> Signup and view all the answers

    What is the current use of rice bran?

    <p>It has little or no use</p> Signup and view all the answers

    What does the project help the nation achieve?

    <p>Self-dependence in edible oil production</p> Signup and view all the answers

    What is Cash Flow from Investing?

    <p>The cash inflows and outflows related to acquiring and disposing of long-term assets and investments</p> Signup and view all the answers

    What is an example of Cash Outflows in Cash Flow from Investing?

    <p>To purchase fixed assets</p> Signup and view all the answers

    What is the purpose of Cash Flow from Financing?

    <p>To obtain cash from issuing debt and borrowing, repaying the amounts borrowed, and providing returns to shareholders</p> Signup and view all the answers

    What are the three main categories of cash flows?

    <p>Operating, Investing, and Financing</p> Signup and view all the answers

    What is an example of Cash Outflows in Cash Flow from Operations?

    <p>To pay suppliers for inventory</p> Signup and view all the answers

    What is the purpose of analyzing Cash Flow statements?

    <p>To assess the company's ability to generate cash and pay its debts</p> Signup and view all the answers

    What does a higher value of Days Inventory Outstanding (DIO) indicate?

    <p>The business is not taking advantage of the credit period provided by creditors.</p> Signup and view all the answers

    What does a lower Sales to Total Assets ratio indicate?

    <p>The business is not using its assets efficiently to generate sales.</p> Signup and view all the answers

    What is the Rule of Thumb for the Current Ratio?

    <p>Higher is better.</p> Signup and view all the answers

    What does a Quick Ratio of 1:1 indicate?

    <p>The company is liquid and can pay its debts.</p> Signup and view all the answers

    What is the purpose of the Current Ratio?

    <p>To measure a company's liquidity.</p> Signup and view all the answers

    What does a higher value of Inventory in Days indicate?

    <p>The inventory is taking a long time to sell.</p> Signup and view all the answers

    What is the purpose of the Quick Ratio?

    <p>To measure a company's liquidity.</p> Signup and view all the answers

    What does a higher value of Sales to Total Assets indicate?

    <p>The business is using its assets efficiently.</p> Signup and view all the answers

    What is the total cost of goods available for sales in 2019?

    <p>1112,000</p> Signup and view all the answers

    What is the closing stock of finished goods in 2019?

    <p>40,000</p> Signup and view all the answers

    What is the raw materials used in 2019?

    <p>575,000</p> Signup and view all the answers

    What is the cost of production/ manufacturing cost in 2018?

    <p>1032,000</p> Signup and view all the answers

    What is the opening stock of raw materials in 2019?

    <p>11,000</p> Signup and view all the answers

    What is the cost of goods sold in 2019?

    <p>1072,000</p> Signup and view all the answers

    What is the closing stock of work-in-process in 2019?

    <p>10,000</p> Signup and view all the answers

    What is the manufacturing cost in 2017?

    <p>954,000</p> Signup and view all the answers

    What is a major challenge for a bank in disbursing quality loans?

    <p>Selecting good and right borrowers</p> Signup and view all the answers

    What has changed the banking business environment significantly?

    <p>Mobile banking and online banking platforms</p> Signup and view all the answers

    Why is it important for banks to have a strong credit culture?

    <p>To minimize the risk of loan defaults</p> Signup and view all the answers

    What is a key aspect of managing a quality loan portfolio?

    <p>Dealing with all stages of the credit cycle professionally</p> Signup and view all the answers

    What is a recent trend in the banking industry?

    <p>Expansion of financial services to women entrepreneurs</p> Signup and view all the answers

    What is a major factor contributing to the increasing competition in the banking industry?

    <p>Entrance of new banks in the credit market</p> Signup and view all the answers

    What is a key objective of banks in managing their credit portfolio?

    <p>To minimize the risk of loan defaults</p> Signup and view all the answers

    What is a result of the expansion of financial services in recent times?

    <p>Rapid expansion of financial services</p> Signup and view all the answers

    What dimension of financial health is primarily important to a short-term creditor, such as a bank?

    <p>Liquidity</p> Signup and view all the answers

    What do financial statements provide information about?

    <p>The company's past performance and future financial position</p> Signup and view all the answers

    What is the purpose of financial statement analysis?

    <p>To obtain useful information about a company's financial health</p> Signup and view all the answers

    What is the primary concern of a long-term creditor, such as a bondholder?

    <p>Profitability and solvency</p> Signup and view all the answers

    What is the primary interest of stockholders when assessing a company's financial health?

    <p>Profitability and solvency</p> Signup and view all the answers

    What do financial statements reveal about a company's past performance?

    <p>The company's management decisions and their consequences</p> Signup and view all the answers

    What is the primary objective of financial statement analysis?

    <p>To obtain useful information about a company's financial health</p> Signup and view all the answers

    What is the primary focus of financial statement analysis?

    <p>Analyzing a company's past performance and current financial position</p> Signup and view all the answers

    What is the purpose of credit planning at the regional or branch level?

    <p>To adhere to head office policy guidelines and analyze the regional economy</p> Signup and view all the answers

    What is divided into different sub-sectors in credit planning?

    <p>Major sectors of the economy</p> Signup and view all the answers

    What is an example of a major sector in credit planning?

    <p>Agriculture</p> Signup and view all the answers

    What is the purpose of determining the command area of a region or branch?

    <p>To understand the regional economy</p> Signup and view all the answers

    What is Table 2.1 in the study material?

    <p>An indicative planning sheet for credit planning</p> Signup and view all the answers

    What is the purpose of finding out the major sectors of the economy in credit planning?

    <p>To understand the regional economy and divide it into sub-sectors</p> Signup and view all the answers

    What is an example of a sub-sector in credit planning?

    <p>Cultivators</p> Signup and view all the answers

    What is the role of the regional/zonal office in credit planning?

    <p>To prepare supplementary policy guidelines</p> Signup and view all the answers

    What do growth ratios, such as sales growth and assets growth, measure?

    <p>A company's survival</p> Signup and view all the answers

    What is the formula for calculating sales growth?

    <p>[CY.S - PY.S) / PY.S] × 100</p> Signup and view all the answers

    What does a higher value of net sales growth indicate?

    <p>The company is performing better than previous years or industry average</p> Signup and view all the answers

    What is the rule of thumb for total liabilities growth?

    <p>Lower is better</p> Signup and view all the answers

    What does profitability ratio indicate?

    <p>The efficiency of a unit in generating surplus</p> Signup and view all the answers

    What is compared in profitability ratio?

    <p>Profit to sales and total assets</p> Signup and view all the answers

    What is the purpose of growth ratios?

    <p>To evaluate if a company will survive</p> Signup and view all the answers

    What does a higher value of net worth growth indicate?

    <p>The company is performing better than previous years or industry average</p> Signup and view all the answers

    What is the estimated total cost of the project according to the entrepreneur?

    <p>Tk.9 crore</p> Signup and view all the answers

    What is the annual production capacity of the company?

    <p>1,00,000 ton thread</p> Signup and view all the answers

    What is the price per ton of thread?

    <p>Tk.300</p> Signup and view all the answers

    What is the annual operating cost excluding depreciation?

    <p>Tk.5,00,000</p> Signup and view all the answers

    What is the interest paid on the previous loan taken from a local bank?

    <p>Tk.50,000</p> Signup and view all the answers

    What will be the value of the equipment that can be sold at the termination of the project?

    <p>Tk.1 crore</p> Signup and view all the answers

    What is the recovery of working capital possible at the termination of the project?

    <p>Tk.1 crore</p> Signup and view all the answers

    What is the tax rate on the company's income?

    <p>40%</p> Signup and view all the answers

    What is the primary interest of a short-term creditor, such as a bank, when evaluating a borrower's financial health?

    <p>Liquidity of the borrower</p> Signup and view all the answers

    What do financial statements provide information about?

    <p>The company's past performance and current financial position</p> Signup and view all the answers

    What is the purpose of financial statement analysis?

    <p>To evaluate the company's financial health and identify trends</p> Signup and view all the answers

    What do long-term creditors, such as bondholders, look at when evaluating a company's financial health?

    <p>Profitability and solvency</p> Signup and view all the answers

    What is the purpose of analyzing financial statements?

    <p>To evaluate the company's financial health and identify trends</p> Signup and view all the answers

    What is the primary purpose of financial ratios in financial analysis?

    <p>To identify financial strengths and weaknesses of a firm</p> Signup and view all the answers

    What do growth ratios, such as sales growth and assets growth, measure in financial analysis?

    <p>A company's potentiality and performance</p> Signup and view all the answers

    What is the benefit of using ratio analysis in financial analysis?

    <p>It helps to identify areas of financial strength and weakness</p> Signup and view all the answers

    What is the relationship between two financial statement items expressed in a ratio?

    <p>A mathematical relationship between two figures</p> Signup and view all the answers

    Why is it important to evaluate a company's financial performance using ratio analysis?

    <p>To identify areas of financial strength and weakness</p> Signup and view all the answers

    What is the primary objective of a loan proposal?

    <p>To provide a comprehensive understanding of the business and its creditworthiness</p> Signup and view all the answers

    What should a loan proposal effectively address?

    <p>All credit risks and provide a comprehensive understanding of the business</p> Signup and view all the answers

    What questions should one constantly ask himself while writing a loan proposal?

    <p>What, Why, and How</p> Signup and view all the answers

    What is the purpose of a loan proposal?

    <p>To act as a proxy for a credit submission within the financial institution</p> Signup and view all the answers

    What should a loan proposal contain?

    <p>A comprehensive overview of the business, including purpose, background, and financial analysis</p> Signup and view all the answers

    What is a key benefit of QVC's 1st mover advantage in manufacturing the product?

    <p>Establishment of a supply chain, leading to import substitution</p> Signup and view all the answers

    What is a critical success factor for QVC in maintaining strong liaison with customers and suppliers?

    <p>Personal commitment of the sponsor</p> Signup and view all the answers

    What is the primary advantage of QVC's manufacturing process?

    <p>Environmentally friendly manufacturing process</p> Signup and view all the answers

    What is a major opportunity for QVC in the near future?

    <p>Horizontal and vertical expansion of the project</p> Signup and view all the answers

    What is the current trend in the demand for QVC's products?

    <p>Increasing demand</p> Signup and view all the answers

    What is the main purpose of financial appraisal?

    <p>To assess the financial soundness of a project</p> Signup and view all the answers

    What does SWOT analysis represent?

    <p>Strengths, Weaknesses, Opportunities, and Threats</p> Signup and view all the answers

    What is the purpose of industry analysis?

    <p>To analyze the company's external environment</p> Signup and view all the answers

    What is the primary purpose of financial statement analysis?

    <p>To provide information about a company's financial health</p> Signup and view all the answers

    What is the primary objective of managing credit portfolio?

    <p>To minimize risk and maximize returns</p> Signup and view all the answers

    What has led to increased competition in the banking industry?

    <p>Entry of new banks in the credit market</p> Signup and view all the answers

    What is a major challenge for a bank in disbursing quality loans?

    <p>Selecting the right borrowers</p> Signup and view all the answers

    What has changed the banking business environment and given it a new shape?

    <p>Mobile banking and online banking platforms</p> Signup and view all the answers

    What is the primary goal of disbursing quality credit to all types of business and segments of the population?

    <p>Financial inclusion</p> Signup and view all the answers

    What has expanded rapidly in recent times in the banking industry?

    <p>Financial services</p> Signup and view all the answers

    What is a key aspect of managing a quality loan portfolio?

    <p>All of the above</p> Signup and view all the answers

    What has remodeled the banking business operation, particularly credit operation?

    <p>Sharecropper financing, school banking, and green banking</p> Signup and view all the answers

    What is the primary concern of banks when introducing new financial products?

    <p>Revenue generation</p> Signup and view all the answers

    What is the focus of banks in addition to financial inclusion?

    <p>SME banking services</p> Signup and view all the answers

    What is a major sector in the banking industry that has seen significant changes?

    <p>Credit operations</p> Signup and view all the answers

    What is considered by the bank before finalizing the loan structure?

    <p>Socio-economic aspect of the project</p> Signup and view all the answers

    What is determined after the bank considers the socio-economic aspect of the project?

    <p>Loan structure, price, tenure, and nature</p> Signup and view all the answers

    At what point are the loan structure, price, tenure, and nature finalized?

    <p>When both parties agree</p> Signup and view all the answers

    What is analyzed based on historical and projected data?

    <p>Financial analysis</p> Signup and view all the answers

    What happens if the bank is satisfied with all aspects of the applicant?

    <p>Documentation and disbursement begin</p> Signup and view all the answers

    What is the primary purpose of Internal Credit Risk Rating System (ICRRs)?

    <p>To provide a framework for measuring and assessing borrowers' credit risk</p> Signup and view all the answers

    What is the primary focus of credit risk assessment and decision making in banks?

    <p>Assessing the creditworthiness of borrowers based on their financial condition</p> Signup and view all the answers

    What is one of the core functions of Internal Credit Risk Rating System?

    <p>To assess the quality of individual borrower</p> Signup and view all the answers

    What is the role of RM in the credit operations process?

    <p>To recommend loan applications for approval</p> Signup and view all the answers

    In case of loan syndication, what do participatory banks do besides the lead bank?

    <p>They perform their own independent assessment and review</p> Signup and view all the answers

    What should be used when the borrower is in multiple lines of business?

    <p>The sector that generates the highest revenue</p> Signup and view all the answers

    Who has the authority to sanction/approve loans?

    <p>All of the above</p> Signup and view all the answers

    What is the key reference for credit risk assessment and decision making in banks?

    <p>Internal Credit Risk Rating (ICRR)</p> Signup and view all the answers

    What happens if the right sector or industry is not selected in Internal Credit Risk Rating System?

    <p>The rating will not reflect the unique characteristics of the particular sector or industry</p> Signup and view all the answers

    What is the purpose of Internal Credit Risk Rating System?

    <p>To assess the quality of individual borrower</p> Signup and view all the answers

    What should the bank do as a last resort to recover the credit from a defaulted borrower?

    <p>Take legal action</p> Signup and view all the answers

    What is the purpose of the Credit Risk Grading (CRG) in the credit appraisal process?

    <p>To evaluate the creditworthiness of the borrower</p> Signup and view all the answers

    What should be done with substandard (SS) or worse accounts?

    <p>Transfer them to the Recovery Unit (RU)</p> Signup and view all the answers

    What is the purpose of the Early Alert Process in credit operations?

    <p>To identify potential defaults</p> Signup and view all the answers

    What should be done with the approved loan proposal?

    <p>Send it to the Credit Administration for disbursement</p> Signup and view all the answers

    What is the primary goal of a bank in the credit selection process?

    <p>To select good borrowers for loan repayment</p> Signup and view all the answers

    What is the purpose of credit investigation in credit risk management?

    <p>To prevent bad credit by selecting good borrowers</p> Signup and view all the answers

    What is the consequence of sanctioning a bad credit according to the text?

    <p>It will not serve the purpose of the bank</p> Signup and view all the answers

    What is the relationship between preventive measures and curative measures in credit risk management?

    <p>Preventive measures are less expensive than curative measures</p> Signup and view all the answers

    What is the outcome of a successful discussion between the banker and the customer?

    <p>The customer is asked to apply for credit in a prescribed format</p> Signup and view all the answers

    Who is responsible for classifying accounts and maintaining required provisions according to the credit policy?

    <p>RM</p> Signup and view all the answers

    What is the primary responsibility of the Recovery Unit (RU) in a bank?

    <p>To determine recovery strategy for NPLs</p> Signup and view all the answers

    Who approves the Classified Loan Review Report (CLR) for NPLs up to a certain percentage of the bank's capital?

    <p>Head of Credit</p> Signup and view all the answers

    What happens to substandard (SS) or worse accounts?

    <p>They are assigned to an Account Manager within the RU</p> Signup and view all the answers

    What is the primary objective of the Recovery Unit (RU) in managing NPLs?

    <p>To maximize recovery and ensure adequate provisioning</p> Signup and view all the answers

    What is the primary role of the Credit Committee/CRM in a bank?

    <p>To sanction and disburse the budgeted amount prudently</p> Signup and view all the answers

    What is the purpose of the procedural guidelines in a bank's credit operations?

    <p>To indicate the list and sequence of several activities associated with credit operations</p> Signup and view all the answers

    Who acts as a primary bank contact with a borrower in a bank?

    <p>Relationship Management (RM)</p> Signup and view all the answers

    What is the outcome of the credit operations in a bank?

    <p>Adjustment and/or recovery of loan</p> Signup and view all the answers

    What is the basis of the procedural guidelines in a bank's credit operations?

    <p>All of the above</p> Signup and view all the answers

    What is the primary purpose of the environmental due diligence checklist?

    <p>To measure the environmental risk of a project</p> Signup and view all the answers

    What is the requirement of banks according to the ERM guideline?

    <p>To maintain a database of NPLs due to environmental reasons</p> Signup and view all the answers

    What is the role of the Board in the ERM guideline?

    <p>To approve high rated projects</p> Signup and view all the answers

    What is the trend of rated projects over the years?

    <p>Increasing</p> Signup and view all the answers

    Why is environmental risk rating important from a credit management point of view?

    <p>It helps in minimizing environmental risk</p> Signup and view all the answers

    What is the purpose of the Guideline for Environment Risk Management introduced in 2011?

    <p>To minimize environmental risk</p> Signup and view all the answers

    What is the frequency of reporting environmental risks according to the ERM guideline?

    <p>Annually</p> Signup and view all the answers

    What is the primary responsibility of banks in the ERM guideline?

    <p>To measure environmental risk</p> Signup and view all the answers

    What is the requirement of banks regarding high rated projects according to the ERM guideline?

    <p>To place them to the Board for approval</p> Signup and view all the answers

    What is the importance of environmental risk management in green banking policy?

    <p>To minimize environmental risk</p> Signup and view all the answers

    What is the primary reason behind the borrower's failure to repay the loan installments?

    <p>Lack of sufficient cash generation</p> Signup and view all the answers

    What action has the Bangladesh Bank (BB) directed the bank to take against the officers involved in re-scheduling the loan?

    <p>Take immediate disciplinary action</p> Signup and view all the answers

    What is the current status of the sweater unit of the project?

    <p>Not operational</p> Signup and view all the answers

    What amount of BMRE loan was disbursed on 09.02.2004 for proper balancing the project?

    <p>Tk. 45.118 million</p> Signup and view all the answers

    What is the scheduled repayment period of the loan amount of Tk. 41.795 million?

    <p>11 years</p> Signup and view all the answers

    What is the primary purpose of credit investigation in the credit operations process?

    <p>To ensure loan repayment by selecting good borrowers</p> Signup and view all the answers

    What is the consequence of sanctioning a bad credit according to the text?

    <p>It is even better not to sanction any credit</p> Signup and view all the answers

    What is the primary focus of the relationship manager (RM) in the credit operations process?

    <p>To ensure that the proposed credit is from the expected business segment</p> Signup and view all the answers

    Why is credit investigation considered a preventive measure in the credit operations process?

    <p>It is a cost-effective measure to prevent bad loans</p> Signup and view all the answers

    What is the primary objective of selecting good borrowers in the credit operations process?

    <p>To ensure loan repayment</p> Signup and view all the answers

    What is the term used to describe the borrower when assessing credit on a consolidated or group basis?

    <p>Obligor</p> Signup and view all the answers

    Who is responsible for classifying the accounts and maintaining required provisions as per credit policy?

    <p>Relationship Manager</p> Signup and view all the answers

    What is the purpose of the Internal Credit Risk Rating System (ICRRs) in credit risk management?

    <p>To analyze a borrower's creditworthiness based on various factors</p> Signup and view all the answers

    Who performs independent assessment, analysis, and review of terms of the syndicate loan in loan syndication?

    <p>Both the lead bank and participatory banks</p> Signup and view all the answers

    What is the primary responsibility of the Recovery Unit (RU)?

    <p>To determine recovery strategy and pursue all options to maximize recovery</p> Signup and view all the answers

    What is the key reference for credit risk assessment and decision making in the Internal Credit Risk Rating System?

    <p>Internal Credit Risk Rating (ICRR)</p> Signup and view all the answers

    Who approves the Classified Loan Review Report (CLR) for NPLs up to a certain percentage of the bank's capital?

    <p>Head of Credit</p> Signup and view all the answers

    What is the dynamic process that the management of Non-Performing Loan (NPL) must be?

    <p>Dynamic</p> Signup and view all the answers

    What is the primary benefit of using the Internal Credit Risk Rating System in credit risk management?

    <p>To provide a granular, objective, transparent, consistent framework for credit risk assessment</p> Signup and view all the answers

    Who serves as the primary customer contact after the account is downgraded to substandard or worse?

    <p>Account Manager within the RU</p> Signup and view all the answers

    What is the primary purpose of Internal Credit Risk Rating System in banks?

    <p>To assess the quality of individual borrower to help the banks to determine the quality of the credit portfolio</p> Signup and view all the answers

    What is the authority to sanction/approve loans delegated to by the Managing Director (MD)/Chief Executive Officer (CEO) and Board of Directors (BOD)?

    <p>Senior credit executives</p> Signup and view all the answers

    What should be used in ICRRS if the borrower is in multiple lines of business and no particular line of business can be singled out?

    <p>Other industry- if manufacturing or other service- if service</p> Signup and view all the answers

    What is the primary responsibility of the Recovery Unit (RU) in a bank?

    <p>To monitor and recover NPLs</p> Signup and view all the answers

    What is the primary purpose of credit approval in banks?

    <p>To assess the creditworthiness of the borrower</p> Signup and view all the answers

    What is the last resort to recover credit from a defaulted borrower?

    <p>Taking legal action against the borrower</p> Signup and view all the answers

    What is the primary objective of credit recovery in banks?

    <p>To recover the defaulted loans</p> Signup and view all the answers

    What happens to substandard (SS) or worse accounts?

    <p>They are sent to the Recovery Unit (RU)</p> Signup and view all the answers

    What is the purpose of introducing incentive programs in credit recovery?

    <p>To encourage the Recovery Unit to recover NPLs</p> Signup and view all the answers

    Who approves CLR’s for NPLs above 25% of capital?

    <p>The MD/CEO</p> Signup and view all the answers

    What was the primary reason for the bank's failure to recover the credit from Mr. Monir?

    <p>Mr. Monir's false information at the time of loan application</p> Signup and view all the answers

    What was the outcome of the bank's efforts to reach Rahela at her mobile number and resident address?

    <p>The bank was unable to reach Rahela at her mobile number and resident address</p> Signup and view all the answers

    What was the reason for Mr. Monir's inability to make payments towards the loan?

    <p>He had passed away, and Rahela was not willing to take responsibility</p> Signup and view all the answers

    What was the response of Rahela when the bank sent a legal notice to her permanent address?

    <p>She denied any involvement in the loan and refused to pay</p> Signup and view all the answers

    What was the mistake made by Mr. Monir during the loan application process?

    <p>He provided false information about his identity and address</p> Signup and view all the answers

    What was the outcome of the bank's investigation regarding Mr. Monir's identity?

    <p>His identity was found to be fake, and his real name was Mr. Mazharul Islam Mahtab</p> Signup and view all the answers

    What was the reason for the bank's failure to recover the credit from Mr. Monir?

    <p>Mr. Monir's false information at the time of loan application</p> Signup and view all the answers

    What was the role of Rahela in the loan application process?

    <p>She was the supplementary card holder</p> Signup and view all the answers

    What was the outcome of the bank's efforts to recover the credit from Mr. Monir?

    <p>The bank was unable to recover any amount of the loan</p> Signup and view all the answers

    What was the significance of the voter ID card in the recovery process?

    <p>It was used to verify the permanent address of Rahela</p> Signup and view all the answers

    What is the primary responsibility of the RM in credit monitoring?

    <p>Classifying accounts and maintaining required provisions</p> Signup and view all the answers

    Who is responsible for approving the Classified Loan Review Report (CLR) for NPLs up to a certain percentage of the bank's capital?

    <p>Head of Credit</p> Signup and view all the answers

    What is the primary focus of the Recovery Unit (RU) in managing NPLs?

    <p>Pursuing all options to maximize recovery</p> Signup and view all the answers

    What is the primary responsibility of the account manager in the Recovery Unit (RU)?

    <p>Coordinating and administering the action plan</p> Signup and view all the answers

    What is the primary goal of the Recovery Unit (RU) in managing NPLs?

    <p>To maximize recovery and ensure adequate provisioning</p> Signup and view all the answers

    What is the purpose of transferring substandard (SS) or worse accounts from RM to RU?

    <p>To monitor and recover the credit more effectively</p> Signup and view all the answers

    What is the primary objective of the incentive program that the bank may introduce for RUs?