Loan Processing Stages Quiz

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Questions and Answers

What is the maximum time allocated for completing Stage-III?

10-12 days (correct)

5-7 days

8-10 days

7 days

Which of the following should be avoided when selecting customers?

Approaching known clients directly

Considering customers referred by existing clients

Involving experienced intermediaries

Giving multiple loans to a single family (correct)

What document is NOT required in Stage-2 during the financial verification process?

Valuation of securities (correct)

Assets and liabilities statements

Credit Information report

IT returns

What is a critical step to take before receiving a loan application from a customer?

Identify the customer through KYC processes Signup and view all the answers

Which document is associated with Stage-3 of the loan processing?

Sanction letter from the previous lender Signup and view all the answers

What is the maximum exposure for the group SB-1 & SB-2?

42000 Signup and view all the answers

Which of the following is NOT a category of counterparties eligible for maximum exposure?

Private LLCs Signup and view all the answers

Under what condition can units or promoters appearing in the 'Wilful defaulters' list receive fresh loan limits?

With the approval of appropriate authority. Signup and view all the answers

What is a mandatory condition for loan applications of ₹10 lac and above?

Search through SBIDBR. Signup and view all the answers

What does the SBI Default Borrower Registry (SBIDBR) aim to achieve?

Align with best practices of data privacy. Signup and view all the answers

Which of the following categories has the highest maximum exposure value listed?

SB-1 & SB-2 Signup and view all the answers

Which statement is true regarding the search process through SBIDBR?

It complements existing pre-sanction activities. Signup and view all the answers

What is the primary purpose of the Credit Policy & Procedures Committee (CPPC)?

To manage credit risk and procedures. Signup and view all the answers

Which committee is responsible for approving the Credit Risk Assessment models?

Credit Risk Management Committee (CRMC). Signup and view all the answers

When is the Loan Policy document reviewed?

Once a year by the Board. Signup and view all the answers

What allows the Bank to permit waivers from prescribed loan norms?

Commercial considerations agreed after evaluation. Signup and view all the answers

Which sub-group has powers equivalent to the CPPC?

Sub-Group of CPPC. Signup and view all the answers

What guideline should the Loan Policy be read in conjunction with?

With procedural circular instructions and periodic guidelines. Signup and view all the answers

What is the role of the DMD of Business Verticals in the loan approval process?

They approve process-related changes without changing guidelines. Signup and view all the answers

What is the main focus of the policies approved by the CPPC?

Managing credit risk through various measures. Signup and view all the answers

What must the advocate do with the TIR and related documents?

Submit them directly to the operating unit. Signup and view all the answers

What is expected of the advocate regarding original title deeds?

Verify and scrutinize them when subsequently provided. Signup and view all the answers

What percentage of one counterparty's gross receipts must be derived from transactions with the other counterparty to establish significant connectedness?

50% Signup and view all the answers

Under what condition does a guarantee create significant connectedness between counterparties?

When the guarantee amount is equal to or greater than 50% of the net worth of the guarantor. Signup and view all the answers

What should a conditional TIR certifying clear and marketable title include?

Such a report would not be acceptable. Signup and view all the answers

What is the minimum percentage of a counterparty’s production that must be sold to another counterpart to indicate a dependency?

30% Signup and view all the answers

What should be done if title deeds are in a vernacular language?

An English translation signed by the bank’s advocate is needed. Signup and view all the answers

What is necessary regarding properties of a Hindu Undivided Family?

Law Officer's opinion must be sought before mortgaging. Signup and view all the answers

What must be true about the expected source of funds to repay loans between connected counterparties?

Both counterparties must be reliant on 100% from the same source. Signup and view all the answers

Which of the following factors is NOT specified in establishing whether one counterparty's financial problems affect another?

No specific parameter is defined. Signup and view all the answers

What needs to be obtained from a borrower if a cooperative housing society is not yet formed?

An undertaking stating the bank would be informed once the society is formed. Signup and view all the answers

What must be done when obtaining certified copies of title documents?

Certify copies and compare them with customer documents. Signup and view all the answers

What percentage of intercorporate liabilities or trade receivables indicates potential connectedness between counterparties?

50% Signup and view all the answers

Who is responsible for paying the professional fees/expenses of the advocate?

The bank pays them directly and recovers the amount from the customer. Signup and view all the answers

What is the minimum percentage of funding that counterparties must share from the same source to indicate a connection?

35% Signup and view all the answers

When counterparties are reliant on a single source for funding, what happens if there is a default by the provider?

The funding problems will likely spread to the other counterparty. Signup and view all the answers

What is a requirement for a public company in terms of membership?

Must have a minimum of 7 members Signup and view all the answers

Which of the following statements is true regarding private companies?

They must have a minimum of 2 members Signup and view all the answers

What distinguishes a private company from a public company?

Public companies can transfer shares freely Signup and view all the answers

What is the maximum number of members allowed in a private company?

200 Signup and view all the answers

Which of the following is not required for a public company before starting business?

Statutory Meeting Signup and view all the answers

Which statement regarding the paid-up share capital for private and public companies is accurate?

The requirement for paid-up capital has been abolished for both company types Signup and view all the answers

What is the status of a private company that is a subsidiary of a public company?

It is automatically termed as a public company Signup and view all the answers

Which of the following options correctly describes a public company's requirement for issuing prospectuses?

Issuing a prospectus is compulsory Signup and view all the answers

Study Notes

SBI Training Unit - Role Guide Cum Certification Manual

This manual is for internal circulation only.
It covers the CP SME Basic Credit program for 2024-25.
The banking industry is changing rapidly, so it's crucial to continually update skills.
The manual provides clarity on roles and responsibilities, and helps mitigate risks in day-to-day work.

Loan Policy Matters - Manual Contents

The manual details the following sections:
- Loan Policy Matters
  - SME Delivery Model (page 4)
  - Pre-Sanction Credit Process (page 4)
    - Types of Borrowers (page 11)
  - Valuation of Assets (page 11)
  - Creation of Equitable Mortgage (page 4)
  - Analysis of Financial Statements (page 4)
  - Prevention of Frauds (page 4)
  - Overview of Working Capital Assessment (page 4)
  - Letter of Credit (page 4)
  - Bank Guarantee (page 4)
  - Export Finance (page 4)
  - Import Finance (page 4)
  - Term Loan (page 4)
  - Credit Risk Assessment (page 4)
  - Preparation of Proposals and Common Mistakes (page 4)
  - Calculation of RAROC (page 4)
  - SME Asset Products (page 4)
  - Post Sanction Process (page 4)
  - Stress Management (page 4)
  - Recovery/ Resolution methods of stressed assets (page 4)

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Test your knowledge on the various stages of loan processing with this quiz. Focus on key documents and critical steps associated with each stage. Perfect for anyone looking to enhance their understanding of loan applications.