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Questions and Answers
What is the primary responsibility of the Credit Policy Committee (CPC)?
What is the primary responsibility of the Credit Policy Committee (CPC)?
Who heads the Credit Policy Committee (CPC)?
Who heads the Credit Policy Committee (CPC)?
Which committee is responsible for the vetting of new products or modifications in existing products?
Which committee is responsible for the vetting of new products or modifications in existing products?
What role does the Risk Management Department serve in relation to credit risk?
What role does the Risk Management Department serve in relation to credit risk?
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What is a function of the Sub-Committee of CPC?
What is a function of the Sub-Committee of CPC?
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How are urgent approvals handled by the respective committees?
How are urgent approvals handled by the respective committees?
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What type of evaluation does the Risk Management Department conduct on the Bank's loan portfolio?
What type of evaluation does the Risk Management Department conduct on the Bank's loan portfolio?
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What document outlines the detailed guidelines related to the Credit Policy Committee and its Sub-committee?
What document outlines the detailed guidelines related to the Credit Policy Committee and its Sub-committee?
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Which of the following refers to loans settled under compromise or write-off?
Which of the following refers to loans settled under compromise or write-off?
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What might restrict lending to companies whose directors are in the Defaulters’ List?
What might restrict lending to companies whose directors are in the Defaulters’ List?
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Which type of loan involves using shares, debentures, and bonds as collateral?
Which type of loan involves using shares, debentures, and bonds as collateral?
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What is one of the limitations concerning the granting of loans to bank officers?
What is one of the limitations concerning the granting of loans to bank officers?
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Which is NOT typically a concern when lending to group or associate concerns?
Which is NOT typically a concern when lending to group or associate concerns?
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What type of loan is specifically structured under Selective Credit Control (SCC)?
What type of loan is specifically structured under Selective Credit Control (SCC)?
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Which loan falls under the category of advances not eligible for bank credit?
Which loan falls under the category of advances not eligible for bank credit?
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What is one way in which banks can utilize their own shares?
What is one way in which banks can utilize their own shares?
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What is the minimum percentage of C & IC customers that must meet the prescribed COE during a financial year?
What is the minimum percentage of C & IC customers that must meet the prescribed COE during a financial year?
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Which authority is responsible for approving the target, benchmark, or hurdle rate for RAROC?
Which authority is responsible for approving the target, benchmark, or hurdle rate for RAROC?
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What is RAROC primarily used for according to the content?
What is RAROC primarily used for according to the content?
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What happens to credit risk exposures with a RAROC below the COE?
What happens to credit risk exposures with a RAROC below the COE?
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Which of the following is an exemption from the RAROC framework?
Which of the following is an exemption from the RAROC framework?
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How is RAROC calculated for fresh or review proposals?
How is RAROC calculated for fresh or review proposals?
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What does RAROC promote according to the content?
What does RAROC promote according to the content?
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Which body issues operational guidelines related to RAROC?
Which body issues operational guidelines related to RAROC?
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What is a primary objective of the Credit Risk Management Policy?
What is a primary objective of the Credit Risk Management Policy?
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Which department is primarily responsible for preparing the Book of Instructions related to credit risk management?
Which department is primarily responsible for preparing the Book of Instructions related to credit risk management?
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What must overseas territories do in relation to their credit operations manuals?
What must overseas territories do in relation to their credit operations manuals?
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What type of guidelines and benchmarks does the Policy mention will prevail for specific products or schemes?
What type of guidelines and benchmarks does the Policy mention will prevail for specific products or schemes?
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How does the Policy aim to improve credit risk management within the Bank?
How does the Policy aim to improve credit risk management within the Bank?
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Which of the following statements about credit exposure management is true?
Which of the following statements about credit exposure management is true?
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What is emphasized in the operational aspects of credit risk management?
What is emphasized in the operational aspects of credit risk management?
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What should be considered when determining credit risk exposure decisions?
What should be considered when determining credit risk exposure decisions?
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What type of loans or advances is a bank prohibited from granting to its directors?
What type of loans or advances is a bank prohibited from granting to its directors?
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Which of the following loans or advances can be made to directors with prior approval of the Board?
Which of the following loans or advances can be made to directors with prior approval of the Board?
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What is a requirement for a director to receive a loan as an employee?
What is a requirement for a director to receive a loan as an employee?
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Which of the following is considered a valid type of facility that can be provided to directors?
Which of the following is considered a valid type of facility that can be provided to directors?
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What is a clean accommodation in the context of banking and loans?
What is a clean accommodation in the context of banking and loans?
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Under what circumstances can a bank extend advances to any human resource affiliated with its directors?
Under what circumstances can a bank extend advances to any human resource affiliated with its directors?
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Which condition must be met for a bank director to effectively guarantee a loan?
Which condition must be met for a bank director to effectively guarantee a loan?
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Which of these options represents a non-fund based facility a bank might provide?
Which of these options represents a non-fund based facility a bank might provide?
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What is the threshold amount above which personal loans cannot be granted to directors of other banks without board sanction?
What is the threshold amount above which personal loans cannot be granted to directors of other banks without board sanction?
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Who must approve loans and advances aggregating Rs. 5 crore and above to the relatives of the Chairman/Managing Director?
Who must approve loans and advances aggregating Rs. 5 crore and above to the relatives of the Chairman/Managing Director?
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Which group is NOT allowed to obtain loans of Rs. 5 crore or more without board approval?
Which group is NOT allowed to obtain loans of Rs. 5 crore or more without board approval?
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When should the Chairman/Managing Director or any other director disclose their interest in a credit proposal?
When should the Chairman/Managing Director or any other director disclose their interest in a credit proposal?
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Who is considered a 'relative' according to the restrictions outlined for granting loans?
Who is considered a 'relative' according to the restrictions outlined for granting loans?
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Which entities fall under the definition of 'other banks' for the context of loan restrictions?
Which entities fall under the definition of 'other banks' for the context of loan restrictions?
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Which of the following must be disclosed by a director when there is a credit proposal they are interested in?
Which of the following must be disclosed by a director when there is a credit proposal they are interested in?
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What should NOT happen when a director of a bank is interested in a credit proposal?
What should NOT happen when a director of a bank is interested in a credit proposal?
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Study Notes
Global Credit Exposure Management Policy 2024 (Bank of Baroda)
- This policy outlines the Bank of Baroda's global credit exposure management practices.
- The policy covers credit risk management, governance structure, segmentation of customers, credit delivery channels, expansion planning, credit strategy and exposure norms.
Governance Structure
- Board: Responsible for overall credit risk management and setting risk appetite.
- Risk Management Committee of the Board (RMCB): Approves the policy and sets major credit risk parameters.
- Credit Policy Committee (CPC): Implements credit risk management policy.
- Product & Process Approval Committee (PPAC): Approves new products and processes.
- Risk Management Department: Measures, monitors and controls credit risk.
Credit Governance and Segmentation
- Corporate & Institutional Credit (C&IC): Borrowers with a gross annual turnover of over Rs. 250 crore.
- MSME: Borrowers satisfying MSMED Act 2006 criteria with investment in plant and machinery not exceeding Rs. 50 crore and gross annual turnover up to Rs.250 crore.
- Rural & Agricultural Banking Business: Accounts related to agriculture and allied activities.
- Retail Lending: Loans for personal consumption and other non-business related purposes.
Credit Delivery Channels
- Branches, operating units (domestic and overseas), specialized branches, and other channels for efficient credit delivery.
Credit Strategy
- Target Sectors and Target Markets: Focuses on specific sectors based on positive, neutral or negative outlook.
- Priority Sector Lending Certificate (PSLC): Allows banks to purchase or sell PSLCs to meet priority sector targets.
- Industries with Compulsory Licensing: Lists sectors required to have industrial licenses for financing.
- Restricted Exposures: Outlines policies like wilful defaulters, fraud accounts, and promoters/directors in defaulters' list.
Exposure Norms
- Single/Group Exposure Limits: Measures bank's maximum exposure to a single borrower or group of related borrowers to mitigate concentration risk.
- Substantial Exposure Cap: Set exposure limits with considerations for mitigating concentration risk.
- Capital Market Exposure: Covers limits for investments in bonds, debentures, and commercial papers.
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Description
This quiz covers the Bank of Baroda's Global Credit Exposure Management Policy for 2024. It includes details on credit risk management practices, governance structures, and strategies for customer segmentation in the banking sector. Test your understanding of the various committees and their responsibilities within the policy framework.
