Loan Covenant Knowledge Quiz

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Questions and Answers

Who is responsible for confirming compliance with loan agreement covenants at least once a year?

  • Internal Control
  • Loan Monitoring unit (correct)
  • Account officers
  • Management Credit Committee

How often does Internal Control carry out covenant compliance check on all consumer credits?

  • Quarterly
  • Annually
  • Bi-annually (correct)
  • Monthly

When does the Management Credit Committee review covenants compliance?

  • Quarterly
  • Annually
  • Bi-annually
  • As needed (correct)

Who should ensure that the Loan Agreement/Offer Letter contains unambiguous covenants?

<p>Legal Department (B)</p> Signup and view all the answers

What is the responsibility of the Credit Risk Management during renewal/review requests going to the MCC?

<p>Completing the covenant compliance sheet (B)</p> Signup and view all the answers

What is the primary objective of pricing in the bank’s loan policy?

<p>To ensure allocation of assets for the highest return (A)</p> Signup and view all the answers

How often should interest on loans be paid, according to the text?

<p>Monthly or quarterly (B)</p> Signup and view all the answers

What should loan proposals carry to indicate customer’s capacity to cover cost increases due to interest rate fluctuations?

<p>Sensitivity analysis (D)</p> Signup and view all the answers

What should the Commitment/Offer Letter contain in relation to the interest rate?

<p>Covenants that permit the bank’s periodic review of the interest rate (A)</p> Signup and view all the answers

What are fees considered as, in relation to the bank’s income?

<p>Key sources of income (A)</p> Signup and view all the answers

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