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LOAN POLICY

S.No. Question Choice1 Choice 2 (Max. Choice 3


(Maximum 1000 Characters) (Max. 1000 1000 (Max. 1000
Characters) Characters) Characters)

1 SBI Loan policy is reviewed Halfyearly Once in a year Quarterly


2 Under the Loan policy guidelines, Every two years Halfyearly Every six
all loan products are subject to months
3 As per the exposure norms 20% of capital 10% of capital 25% of
prescribed in the Loan policy, the funds funds capital funds
ceiling fixed by RBI for a single
borrower is
4 The Bank’s Loan Policy deals Operational Risk Market Risk Liquidity Risk
with the Bank’s approach to
5 RBI has clarified the term All credit Credit and All fund-
“Exposure” for the purpose of exposures not Investments based credit
Prudential exposure norms Investments limits only
6 As per Bank’s Loan Policy, Bank 10% of Bank’s 20% of Bank’s 15% of
shall endeavour to restrict Fund domestic Fund domestic Fund and Bank’s
Based and Non Fund based and Non fund Non fund based domestic
exposure to a particular industry based exposure exposure Fund and Non
to fund based
7 The Bank’s Loan Policy applies to All fund based All domestic All overseas
lendings lendings lendings

8 As per the exposure norms 40% of capital 50% of capital 35% of


prescribed in the Loan policy, the funds funds capital funds
ceiling fixed by RBI for a group is
9 As per Bank’s Loan Policy, the =>1.25 =>1.33 =>1.20
desired level for Current Ratio for
a manufacturing unit is
10 As per Bank’s Loan Policy, no 10 years 5 years 15 years
Bank Guarantee should normally
have a maturity of more than
11 As per the Loan Policy, no SB 8 SB 10 SB 9
enhancements in credit limits or
new connections are to be
considered in respect of
accounts rated below
12 Generally, takeover of loans 10.00 lacs 25.00 lacs 50.00 lacs
below Rs. _____ to be
13 As per takeover norms, for SB-8 SB-7 SB-5
exposures from Rs. 25.00 lacs
and above to less than Rs. 50.00
crores, the CRA of the borrower
should be ______ or better.
14 ECR is not mandatory for 10.00 crores 25.00 crores 7.50 crores
exposures of less than Rs.

Page 1
LOAN POLICY

Choice 4 (Max. Right Ans Category Chapter


1000 Characters) (Numeric) ( Number
B-Basic, (Numeric)
M-Medium,
A-Advance,
S-
Situational,
Once in two years 2 G-Grace)
B 2
Every year 3 B 2

15% of capital funds 4 B 2

Credit Risk 4 B 2

All fund-based and 2 B 2


Non Fund-based
credit limits only
25% of Bank’s 3 B 2
domestic Fund and
Non fund based
exposure

All domestic as well 4 B 2


as international
lendings
30% of capital funds 4 B 2

=>1.00 2 B 2

12 years 1 B 2

SB 12 2 B 2

15.00 lacs 2 B 2

SB-6 2 B 2

50.00 crores 4 B 2

Page 2
LOAN POLICY

15 As per takeover norms, for SB-5 SB-9 SB-8


exposures from Rs. 50.00 crores
and above , where ECR is
available, CRA should be ______
16 For exposures above Rs. 50.00 BBB+ BBB- BBB
crores, where ECR is available,
ECR should be ______ or better.
17 External rating letter, produced Accessing the Obtaining a ECR not to be
by the propective borrower has External Rating written verified
to be verified independently by: Agency’s web- confirmation from
site the External Rating
18 Accounts restructured under Authority one Sanctioning ECCB
CDR/JLF/accounts under step higher than Authority
rehabilitation or under OTS Sanctioning
should not be taken over except Authority
19 Dilution of security cover at the 10% 15% There should
time of takeover can be be no dilution
considered upto the extent of: in security
cover

20 The Credit Information Report Mandatorily to Not to be taken Need not be


(CIR) from the transferor Bank at be obtained insisted upon
the time of takeover of credit
facilities
21 In case CIR is not received/ One Two Thee
provided by transferor Bank,
statement of account for the last
_____ year are to be obtained
and scrutinized.
22 A declaration should be obtained It does not have There are no Only A
from the applicant unit that: any other credit overdue statutory
facility in any dues
bank/ FI/ NBFC
which is
23 When a Term Loan is also being It should have a It should not have Both A & B
taken over: prompt been restructured/
repayment track rescheduled in the
record preceding two
24 Perfection of securities must be 60 30 45
completed within _____ days of
disbursement in case of
Takeover of Accounts.
25 Which of the undernoted Increasing our Where we join a Only A
situation/(s) is/are not share either in consortium either
considered as takeover: Consortium or as a additional
MBA of which member or when
we are already a another bank exits

Page 3
LOAN POLICY

SB-7 2 B 2

BB 3 B 2

Both A & B 1 B 2

WBCC-I 3 B 2

Dilution in security 3 B 2
cover, if any, may
be put up to the
Sanctioning
Authority for
Facility cannot be 3 B 2
put up for sanction
unless CIR has been
obtained
Statement since 1 B 2
opening of account
with transferor bank
to be perused

Both A & B 4 B 2

Only A 3 B 2

90 4 B 2

Both A & B 4 B 2

Page 4
LOAN POLICY

26 Takeover norms would apply 1 3 2


even if borrower offers to
liquidate existing credit facilities
before disbursement by our
Bank with the exception that if there
is a time gap of _______ months
between liquidation of existing facilities
27 and
As disbursement
per the Loan by our Bank
Policy, the 8 years 7 years 10 years
maturity of any term loan should
not normally exceed
28 In terms of which section of Section 25(2) Section 20(1) Section 20(2)
Banking Regulation Act, 1949,
the Bank cannot grant any loans
and advances against security of
its own shares
29 Maximum ceiling prescribed by Rs. 25.00 crores Rs. 100.00 crores Rs. 50.00
the Bank for Individuals as crores
30 Maximum ceiling prescribed by Rs. 25.00 crores Rs. 100.00 crores Rs. 50.00
the Bank for Non-corporates is crores
31 Non Fund Based facilities should 150% 200% 100%
not exceed ______ % of Bank’s
total fund based exposure
32 Borrowal accounts rated _______ SB-11 SB-10 SB-9
and worse are to be reviewed at
half yearly intervals
33 Term loans sanctioned and not 3 months 9 months 6 months
availed within a period of
_________ from the date of
sanction need revalidation.
34 The desired level of financial <=3.60 <=4.50 <=5.00
ratio ‘Long Term Debt/ EBITDA’ in
case of manufacturing segment
is prescribed as
35 The minimum acceptable level of <=3.60 <=4.50 <=5.00
financial ratio ‘Long Term Debt/
EBITDA’ in case of Trade &
Services segment is prescribed
36 The minimum acceptable level of >=2.60 >=2.50 >=2.00
‘Interest Coverage Ratio’ in case
of Trade & Services segment is
prescribed as
37 The undernoted measure/(s) Tightening of Dynamic Review of Introduction
may be taken as a step towards post sanction Internal Rating of a system
controlling NPA Accretion credit process that will
provide Early
Warning
38 The desired level of financial <=4.00 <=5.00 <=7.00
ratio ‘TOL/Adjusted TNW’ in case
of manufacturing segment is
prescribed as

Page 5
LOAN POLICY

6 2 B 2

9 years 3 B 2

Section 20(3) 2 B 2

Rs. 10 crores 3 B 2

Rs. 10 crores 2 B 2

50% 3 B 2

SB-12 1 B 2

2 months 3 B 2

<=6.00 1 B 2

<=6.00 4 B 2

>=2.75 3 B 2

All of the above 4 B 2

<=3.00 1 B 2

Page 6
LOAN POLICY

39 The minimum acceptable level of <=4.00 <=5.00 <=7.00


financial ratio ‘TOL/Adjusted
TNW’ in case of Trade and
Services segment is prescribed
40 Cash Budget method is used for Seasonal For sanction of ad- Only A
assessing working capital industries like hoc working
finance for sugar, tea and capital limits
construction
activity
41 Whether Bank’s Loan Policy yes as it is loan policy No
applies to Overseas Subsidiaries guidelines
and the Joint Ventures of the approved by their
Bank respective boards,
42 What is Credit Policy & authorized the CPPC
Procedures Committee (CPPC) setting up of a approves
Credit Policy & policies for
Procedures exposure
Committee limits, loan
(CPPC) at the CPPC approves management
Corporate policies for and for NPA
Centre for managing credit management
dealing with all risk covering loan including
issues relating appraisal for industrial
to credit policy assessment of rehabilitation,
and procedures need based credit, compromises
43 What is RMCB(Risk Management Limits for
Committee of the Board) Credit Risk various
All decisions of Assessment industries
CPPC are put up models are are
to RMCB for approved by approved by
information RMCB RMCB
44 Yes, Sanctioning NO yes, based
committee can on sound
give commercial
consideration
s that are
agreed after
careful
evaluation of
Whether we can permit waiver in individual
the prescribed Loan Policy norms cases

Page 7
LOAN POLICY

<=3.00 3 B 2

Both A & B 4 B 2

Have no loan policy 2 M 2

All A,B & C 4 A 2

Both A & B 4 A 2

structure covering 3 A 2
delegation of power
to permit such
waivers , they can
give waiver without
considering
commercial
considerations and
careful evaluation
of individual cases

Page 8
LOAN POLICY

45 where the
realisable
value of the
an exposure security
where the an exposure (primary plus
realisable value where the collateral), as
of the security realisable value assessed by
(primary plus of the security the Bank /
collateral), as (primary plus approved
assessed by the collateral), as valuers /
Bank / approved assessed by the RBI's
valuers / RBI's Bank / approved inspecting
inspecting valuers / RBI's officers, is
officers, is ab- inspecting officers, ab-initio not
initio not more is ab-initio not more than
than 10% of the more than 25% of 30% of the
outstanding the outstanding outstanding
What is Unsecured Exposure exposure. exposure. exposure.
46 Prudential
Exposure Limits
are the limits
expressed as
percentage of IPEL) based on IPEL) based
What is Internal Prudential the Bank’s Internal Credit on external
Exposure Limit (IPEL)? Capital Funds. Rating Credit Rating
47 the guiding Company
principle being does,t
commonality of de-facto control of belongs to
management the affairs of the the holding
How Group/ Connected Company are and effective company is naot a company
defined by regulator control determining fact group
48 Large
borrower is
Large borrower defined as a
is defined as a Large borrower is borrower to
borrower to defined as a whom the
whom the borrower to whom Bank’s
Bank’s exposure the Bank’s exposure
exceeds 10 % of exposure exceeds exceeds 20 %
How Large Borrower are defined by the Bank’s 15 % of the Bank’s of the Bank’s
regulator capital funds capital funds capital funds
49 credit exposure credit exposure
(The sanctioned and investment
limits or exposure. (The
outstandings, sanctioned limits
whichever are or outstandings,
higher,) fully whichever are investment
drawn TL o/S higher,) fully exposure
shall be drawn TL o/S shall shall be
How exposure is defined in loan reckoned as the be reckoned as the reckoned as
policy? exposure exposure the exposure

Page 9
LOAN POLICY

1 A 2

an exposure where
the realisable
value of the
security (primary
plus collateral), as
assessed by the
Bank / approved
valuers / RBI's
inspecting officers,
is ab-initio not more
than 140% of the
outstanding
exposure.
A&B 4 A 2

1 A 2

Associate Company
does,t belongs to
the holding
company group
1 A 2

Large borrower is
defined as a
borrower to whom
the Bank’s exposure
exceeds 18 % of the
Bank’s capital funds
2 A 2

credit exposure and


investment
exposure. (The
sanctioned limits
shall be reckoned as
the exposure

Page 10
LOAN POLICY

50 i. All types of Credit Exposure i. All types of


funded and non- on account of funded and
funded credit derivative non-funded
limits, products using credit limits,
credit conversion ii. Credit
factor; Exposure on
account of
derivative
products
using credit
conversion
factor;
iii. Facilities
extended by
way of
equipment
leasing, hire
purchase
finance and
factoring
How credit exposure is defined services.
in loan policy?
51 Investments in Investments in iii.
shares and PSU bonds, Investments
debentures of Investments in in
companies Commercial Commercial
,Investments in Papers and similar Papers and
PSU bonds commitments. similar
,Investments in commitments
Commercial .
Papers and
similar
How Investment exposure is commitments.
defined in loan policy?
52 Bank serves as It is expected
leaders to bring to fill the
Under the about a co- credit gaps to
scheme, Bank ordination of co- improve bank
assumes the operative banks, advances in
role of catalytic commercial banks rural areas,
agents of and other financial especially to
economic institutions in the priority
development in respective districts sectors and
What is the role of Bank under the lead districts for overall weaker
Lead Bank Scheme area. development. sections.

Page 11
LOAN POLICY

i. All types of fund 3 A 2


based credit limits,
ii. Credit Exposure
on account of
derivative products
using credit
conversion factor;
iii. Facilities
extended by way of
equipment leasing,
hire purchase
finance and
factoring services.

Investments in 1 A 2
shares and
debentures of
companies,
Investments in PSU
bonds

all of above 4 A 2

Page 12
LOAN POLICY

53 The Bank has


continuously
been striving to
maintain
transparent and
fair practices, Under FPC
and stand by its FPC gives Bank has put
commitments guidelines only in in place a
made to respect of mechanism
customers acknowledging for redressal
under the Fair receipt of loan of grievances
What is Fair Practice Code (FPC) Practices Code applications of borrowers.
54 changes made,
if any, on
account of
regulatory
guidelines,
annual policy
guidelines
issued by the
Chairman and
requests
received from
business groups
etc. and
approved by The Loan
CPPC form part Policy is
of the policy and reviewed
are all The Loan Policy is whenever
incorporated in reviewed twice in there is a
What is the thefriquency of the annual a year by the need of
review of a loan policy review. Chairman improvement
55 At present different business NBG, CCG,CAG NBG,MCG,CAG R&DBG,
verticals (related to advances) of MCG,CAG
bank are as following
56 What is the classification of CAG Exposure above internal rating) of
Rs.500 Cr the account,
business potential
and the client’s
reputation or
strategic
importance in credit risk of
addition to the size CAG will have
of the account. no default
57 NPA Accounts SMA Accounts Non-
Performing
Assets, and
assets under
Stressed Assets Resolution stress
Group (SARG) focuses on which (including
type of accounts SMA-2),

Page 13
LOAN POLICY

1&3 4 A 2

1 A 2

The Loan Policy is


reviewed once in a
year by the Board.
No changes can be
made between two
reviews.
R&DBG, CCG,CAG 4 B 2

Exposure above 2 B 2
Rs.1000 Cr

3 B 2

Non-Performing
Assets, and assets
under stress
(including SMA),

Page 14
LOAN POLICY

58 Project cost will if business All the


be the only proposals is having project loan
criterion for complexity, even will be
making though the handeled by
reference to projects do not lie PFSBU
PFSBU for within the
vetting or indicated
appraisal parameters for
of proposals. appraisal / vetting
The key guidelinesregarding by them. Such
PFSBU are as following references are to
59 Under Financial Due Diligence The financials of
we have to verify following the main
documents company and its
major
associate / sister
concerns should
be reviewed, as
far as possible,
on the basis of
provisional The financials of Verification of
financials of the the main company stautory
concerns on a only should be return will not
common date. reviewed, covered
60 we can grant No we can,t we can grant
advances advances
against shares against
of holding shares of
companies , holding
statutory companies ,
provisions statutory
regarding this provisions
contained in regarding this
Sections 19(2) contained in
and 19(3) of the Sections
Banking 19(2) and
Regulation Act, 19(3) of the
1949 must be Companies
whether we can grant loans strictly act 2013
and advances against shares of observed. must be
Holding Shares in Companies strictly
61 Is there any restriction on Credit Yes as per the Circle CGM
to Companies for Buy-back of provision of loan Bank shall not can give such
their Securities policy provide such loans permission
62 Under norms for takeover of Rs.10 Lacs Rs.1 Lac Rs.5 Lacs
advances under Agriculture
segment (other than Agro based
industries ) agricultural cash
credits eligible for takeover,
subject to The minimum amount
eligible for takeover would be

Page 15
LOAN POLICY

1&2 4 A 2

The financials of the 4 A 2


main company and
its major associate /
sister concerns
Verification of
Income Tax, Sales
Tax, Excise Returns,
GST return etc.
must also be
ensured.

we can grant 1 A 2
advances against
shares of holding
companies ,
statutory provisions
regarding this
contained in
Sections 19(2) and
19(3) of the
Companies act
1956 must be
strictly observed.

require permission 2 M 2
of sanctioning
authority
Rs.25 Lacs 2 M 2

Page 16
LOAN POLICY

63 Under norms for takeover of Rs.10 Lacs Rs.1 Lac Rs.5 Lacs
advances under Agriculture
segment (other than Agro based
industries )ATL– for Allied
Activities eligible for takeover,
subject to The minimum amount
eligible for takeover would be
64 advances under Agriculture Rs.10 Lacs Rs.1 Lac Rs.2 Lacs
segment (other than Agro based
industries ) ATL for other than
allied activities eligible for
takeover, subject to The
minimum amount eligible for
takeover would be
65 Under norms for takeover of Rs.1 Cr Rs.2 Cr Rs.5 Cr
advances under Agriculture
segment (other than Agro based
industries ) Maximum amount
eligible for takeover would be
66 guidelines on guidelines on guidelines on
Large Exposure Large Exposure Large
Framework (LEF) Framework (LEF) Exposure
to be to be implemented Framework
In order to align the exposure implemented with effect from (LEF) to be
norms for Indian banks with the with effect from 01.04.2019. implemented
BCBS standards, RBI has issued 01.04.2018. with effect
guidelines on Large Exposure from
Framework (LEF) 01.04.2020.
67 sum of all exposure is
exposures of a defined as
Bank to a Large exposure is the sum of all
counterparty or defined as the sum exposures of
a group of of all exposures of a Bank to a
connected a Bank to a counterparty
counterparties is counterparty or a or a group of
equal to or group of connected
above 10% of connected counterpartie
Bank’s eligible counterparties is s is equal to
capital base. equal to or above or above 10%
i.e., Tier I 10% of Bank’s of Bank’s
capital. (instead eligible capital eligible
of total capital base. i.e., Tier I capital base.
How Large exposure has been funds as capital+ Tier 2 (total capital
defined hitherto). Capital funds ).

Page 17
LOAN POLICY

Rs.25 Lacs 1 M 2

Rs.25 Lacs 3 M 2

Rs10 Cr 2 M 2

guidelines on Large 2 M 2
Exposure
Framework (LEF) to
be implemented
with effect from
01.09.2018.

1 A 2

Large exposure is
defined as the sum
of all exposures of a
Bank to a
counterparty or a
group of connected
counterparties is
equal to or above
15% of Bank’s
eligible capital
base. i.e., Tier I
capital. (instead of
total capital funds
as hitherto).

Page 18
LOAN POLICY

68 Specified Borrower under a. Rs. 25,000 Rs. 25,000 Crs at Rs. 15,000
Enhancing credit supply for large Crs at any time any time during FY Crs at any
borrowers through market during FY 2017- 2017-18 time during
mechanism are defined by RBI 18 b. Rs. FY 2018-19
As per guidelines, if any unit is 15,000 Crs at
having Aggregate Sanctioned any time during
Credit Limit (‘ASCL’) of FY 2018-19
more than________ it will be c. Rs. 10,000
considered as Specified borrower Crs at any time
from April 1,
2019 onwards

69 What is Aggregate Sanctioned aggregate of the aggregate of the aggregate of


Credit Limit (ASCL) fund based fund based + Non the fund
credit limits Fund based credit based credit
sanctioned or limits sanctioned limits
outstanding, or outstanding, outstanding,
whichever is whichever is to a borrower
higher, to a higher, to a by the
borrower by the borrower by the banking
banking system. banking system. system. ASCL
ASCL also ASCL also include: also include:
include: (Unlisted privately (Unlisted
(Unlisted placed debt with privately
privately placed the banking placed debt
debt with the system and ECB, with the
banking system trade credit raised banking
and ECB, from overseas system and
trade credit branches of Indian ECB, trade
raised from Bank ) credit raised
overseas from
branches of overseas
70 RBI defines unsecured exposur 10% 20% 15%
an exposure where the realizable
value of the security (primary
plus collateral), as assessed by
the Bank / approved valuers /
RBI’s inspecting officers, is ab-
initio not more than _______ of
the outstanding exposure.
71 As per RBI Bank’s exposure to 10% 20% 30%
real estate including residential
mortgages, commercial real
estate and indirect finance, etc.,
will not exceed _______% of the
Bank’s total advances.

Page 19
LOAN POLICY

Rs. 10,000 Crs at 1 M 2


any time from April
1, 2019 onwards

aggregate of the 1 M 2
fund based credit
limits sanctioned to
a borrower by the
banking system.

110% 1 M 2

40% 3 M 2

Page 20
LOAN POLICY

72 To contain concentration and 15%,5% 15%,10% 10%,5%


contagion risks arising out of
Intra Group Transactions of
Exposure (ITEs), certain
quantitative limits on financial
ITEs and prudential measures for
the non-financial ITEs have been
imposed .AS per guidelines
Single Group Entity Exposure
means
i) ____ of Paid-up Capital and
Reserves in case of non-financial
companies and unregulated
financial services companies
ii) ________ of Paid-up Capital and
Reserves in case of regulated
financial services companies.
73 As per loan policy Non Fund 100% 200% 50%
Based facility (ies) not to exceed
_____ Bank’s total fund based
exposure. Review of NFB
facility to be carried out by CPPD
at quarterly intervals, as
hitherto.
74 As per loamn policy Bank shall 10%, Yearly 15%, Yearly 15%, Half
endeavor to restrict domestic Yearly
exposure to a particular industry
to a maximum of ____ of the
Bank’s total domestic exposure.
Review shall be done by CRMD
at ______intervals or at a lesser
frequency if significant change
occurs in the industry profile, as
hitherto.
75 As per loan policy the long 10%, Yearly 30%, Yearly 30%, Half
gestation periods in the Yearly
infrastructure sector, it is
considered prudent to
cap exposure to that sector at
_____ of the Bank’s total
domestic exposure. Any waiver
is to be
approved by ECCB. ______ review
shall be submitted to CRMC by
CRMD.

76 CRMD (Industry Research) 0.25% 0.50% 0.05%


conducts study of industries/
sectors, where the Bank’s
exposure is _____ or above of the
Bank’s total domestic exposure.

Page 21
LOAN POLICY

5%,10% 4 M 2

150% 1 M 2

20%, Yearly 2 M 2

15%, Half Yearly 3 M 2

1% 1 M 2

Page 22
LOAN POLICY

77 Under CRMD industry syudy , if 15,15 20,20 25,25


approved exposure ceilings are
within the formula driven
exposure limit is called Risk
Adjusted Exposure Limits (RAEL)
for each industry. CRMC has the
authority to deviate from the
RAEL upto + _____ bps. Any
wavier in the exposure ceiling
beyond + ____ bps shall require
78 The Bank’s aggregate exposure 10% 20% 30%
to the capital markets shall not
exceed ______of its net-worth as
on March 31 of the previous
79 Global Markets Department, at Monthly Yearly Quarterly
_______ intervals will undertake
review of actual capital market
exposure under the ceiling of
80 Global Markets Department, at 20% 40% 60%
Quarterly intervals will
undertake review of actual
capital market exposure under
the ceiling of 40%.Within the
overall ceiling of 40%, Bank’s
investment in shares,
convertible bonds / debentures,
units of equity-oriented mutual
funds and all exposures to
Venture Capital Funds (VCFs)
[both registered and
unregistered] shall not exceed
______ of Bank’s net-worth as on

Page 23
LOAN POLICY

10,10 4 M 2

40% 4 M 2

Half yearly 3 M 2

80% 1 M 2

Page 24
SME CREDIT DELIVERY MODEL

S.No. Question Choice1 Choice 2 (Max.


(Maximum 1000 Characters) (Max. 1000 1000
Characters) Characters)

1 At RASME Centre who will be AMT at Branch where


customer contact point for advances RASME Centre account is
limit upto Rs.50 lacs? maintained
2 RMSE to handle advances accounts 75 Lacs 2 Crore
with limit above Rs.50 lacs to Rs.
______ at BPR Centre.
3 RMME to handle advances 5 Crore 1 Crore
accounts with limit above
Rs.______ crore at BPR Centre.
4 Which cell/AMT at SME centre will GSSAMT Risk Rating Cell
do the processing of SME advances
proposal of Rs.40 lacs under
Bank’s regular scheme?
5 Who will do additional assessment Chief Manager Chief Manager
of RMSE proposal at SME Centre? (Loan (Sanction)
Administration)
6 CRA Validation of RMSE’s proposal Chief Manager Risk Rater at
at SME Centre will be done by? (Sanction) SME Centre

7 Collection Team at SME Centre is Branches RMSE Accounts


responsible for handling collection
and recovery for accounts
maintained at _______________.
8 For advances proposal falling under Risk Rater at LPC at RBO
the sanctioning power of RCC at RBO
Non-BPR Centre, confirmatory
check with regards to Bank’s policy
and guidelines is required to be
conducted by____________.

9 Which of the following is objective of Business Enhanced


SME Delivery Model in the Bank? Ownership Customer
Model Engagement
10 Who at SME Centre is responsible Collateral GSSAMT
for disbursement, maintenance and Security Centre
monitoring for all SME advances
upto Rs.50 lacs under Government
Sponsored Scheme?
11 Which cell at SME Centre is Documentation Risk Rating Cell
responsible for documentation and and Collateral
collateral due diligence after Security Cell
sanction of advances?
12 The bench mark for number of high 35 50-60
value SE accounts to be handled by
a RMSE is ____ CIF at BPR Centre.

Page 1
SME CREDIT DELIVERY MODEL

Choice 3 (Max. 1000 Choice 4 (Max. 1000 Right Ans Category( Chapter
Characters) Characters) (Numeric) B-Basic, Number
M-Medium, (Numeric)
A-Advance,
S-Situational,
G-Grace)
Maintenance Cell at RASME RMSE 1 B 3
Centre

5 Crore 1 Crore 3 B 3

2 Crore 10 Crore 1 B 3

SLAMT Credit Management 3 M 3


Cell

Branch Head Head of SME Centre 4 M 3

Head of SME Centre Branch Head 2 M 3

SME Centre None of the above 3 M 3

Manager(Credit & NPA) Secretariat, RCC 4 A 3

Quality Credit Portfolio through All the above 4 A 3


risk mitigation

Risk Rating Cell Documentation Centre 2 A 3

Chief Manager (Sanction) Maintenance Cell 1 A 3

40 25 2 A 3

Page 2
SME CREDIT DELIVERY MODEL

13 In a group of companies, the unit Team required Concerned


with highest exposure is with the to handle as Branch
RMSE TEAM. Then who is required per exposure in
to handle all the accounts of the a particular unit
other associate/group concerns of under SME
that unit? Delivery Model

14 Who will sign the sanction letter on Branch RMSE


behalf of the Bank for accounts Manager of
handled by RMSE at SME Centre home branch
places?
15 A borrower having cash credit limit RMSE Team Branch where
of Rs.50 lacs is being handled by Linked to the account is
SLAMT at SME Centre. Now, the SME Centre maintained
borrower has requested for
enhancement in limit to Rs.54 lacs.
Who will process the proposal?
16 A customer approaches the Branch Branch will Branch will return
at BPR Cetnre with a proposal for decline the the proposal to
sanction of Cash Credit Limit of proposal the customer and
Rs.40 lacs. At that centre, all SME direct him to SME
accounts with limit upto Rs.50 lacs Centre
are being handled by SME Centre.
What the Branch will do with the
request of the borrower?

17 A customer approaches the RMSE KYC Copy of Title


Team for sanction of Term Loan of documents of Deeds, TIR and
Rs.1 crore and Cash Credit limit of the customer Valuation Report
Rs.50 lacs. The customer also of the property
offers additional collateral security offered as
of his residential house. RMSE collateral
processes the proposal and
forwards the proposal memorandum
with CRA to RBO as the exposure
falls under the financial power of
RCC. The RMSE receives a call
from RBO that certain other
documents also needs to be sent as
per existing instruction of the bank.
What are these documents?

Page 3
SME CREDIT DELIVERY MODEL

RMSE Team None of the above 3 A 3

Regional Manager Chief Manager 2 A 3


(Sanction) at SME
Centre

SLAMT at SME Centre None of the above 3 S 3

Branch will not take any action Branch will collect 4 S 3


on the proposal as it is outside proposal / KYC
their purview documents / other
available information
from the customer and
forward it to SME
Centre for processing

Pre Sanction Survey Report None of the above 2 S 3

Page 4
SME CREDIT DELIVERY MODEL

18 A cash credit limit of Rs.7 crore to No. On There is no


M/s. ABC Pvt. Limited was satisfactory requirement of
sanctioned by ZCC. The account is documentation taking approval
being handled by RMME at the and charge before
Branch. After documentation and creation, limit disbursement.
charge creation, RMME submitted a should be
proposal for disbursement of loan to released.
the Branch Head in the Bank's
prescribed format. Is there any
process yet to be completed before
disbursement of loan.
19 A company with total exposure of No. As the Yes. As the
Rs.2 crores at present being RMSE is proposal is for a
handled by RMSE of the Branch at handling the limit of Rs.25
a BPR Centre. The company also company with lacs.
has an associate firm. The higher limit, he
associate firm approaches the is also required
Branch for sanction of cash credit to handle
limit of Rs.25 lacs for their business. proposal of all
Branch forwards the proposal of the associate
firm to the linked SME Centre at the concern of the
place. Whether the branch action is company with
correct? lower or similar
limits.

20 A borrower having cash credit limit RMSE Team SME Centre


of Rs.5 crores is being handled by
RMSE Team at BPR Centre. Now,
the borrower has requested for
enhancement in limit to Rs.6.10
crores. Who will process the
proposal?
21 A proposal for sanction of Cash RMSE at the Documentation
Credit limit of Rs.2.50 crore Branch and Collateral
processed by RMSE at the branch Cell at SME
and sanctioned by RCC. The Centre
Branch is linked with SME Centre at
that place. Who is responsible for
execution of necessary documents,
charge creation, title deed
verification and physical verification
of mortgaged assets.
22 Who is responsible for sourcing of Collection Cell Maintenance Cell
proposal upto Rs.50 lacs at BPR
Centre?
23 Which Cell/AMT at SME centre will SLAMT GSSAMT
do the processing of SME advances
proposal of Rs.25 lacs under
Government Sponsored Scheme?

Page 5
SME CREDIT DELIVERY MODEL

RMME has to inform concerned Branch has to send the 3 S 3


Zonal Office regarding proposal for
completion of documentation disbursement to RBO
and charge creation. Zonal for approval
Office has to arrange for
verification of documents
executed, charge created and
physical verification of
mortgaged property before
disbursement of the loan.

Regional Manager will decide RMSE will decide in 1 S 3


in this regard this regard

RMME linked to the branch None of the above 3 S 3

Regional Business Office Branch Manager 2 S 3

AMT at SME Centre/MPST/ None of the above 3 G 3


Branch

Branch None of the above 2 G 3

Page 6
SME CREDIT DELIVERY MODEL

24 RMME Team will consist of a Field Officer Assistant


Relationship Manager and a
___________.
25 At BPR Centre, who is responsible SMECC Branch
to handle SME advances upto
Rs.50 lacs?
26 At Non-BPR Centre, who is RASMEC Branch
responsible to handle SME
advances upto Rs.50 lacs?
27 As per SME Delivery Model, who is RMSE TEAM SME Centre
responsible to handle SME
advances above Rs.5 crore at Non
BPR Centre?
28 As per SME Delivery Model, who is RMSE TEAM SME Centre
responsible to handle SME
advances above Rs.5 crore at BPR
Centre?
29 As per SME Delivery Model, who is RMSE TEAM RBO
responsible to handle SME
advances of Rs.1 crore at BPR
Centre?
30 As per SME Delivery Model, who is RMSE TEAM RASMEC
responsible to handle SME where RMSE
advances of Rs.1 crore at Non-BPR has been
Centre? posted
31 M/s. SME Enterprises, a wholesale Branch to Branch to
trader, has approached a branch for forward the forward the
sanction of working capital limit of proposal to proposal to linked
Rs.2 crores at BPR Centre place RBO for RMSE team /
linked with SME Centre. What processing SME Cetnre for
action branch has to take with processing the
regard of this request? proposal

32 GSSAMT at SME Centre are Govt. MUDRA Loans


responsible to handle advances Sponsored
under which scheme? Scheme
33 SLAMT at SME Centre are Other than MUDRA Loans
responsible to handle advances Govt.
under which scheme? Sponsored
Scheme and
Mudra Loan
34 Who will validate the CRA of a SME RBO RMSE
proposal of Rs.70 lacs at SME
Centre place?
35 Who will validate the CRA of a SME Risk Rater at RMSE
proposal of Rs.70 lacs at RASME RBO
Centre place?

Page 7
SME CREDIT DELIVERY MODEL

Branch Manager Credit Support Officer 4 G 3


(CSO)

RBO None of the above 1 B 3

SME Centre None of the above 2 G 3

RMME TEAM RASMEC 3 B 3

RMME TEAM RASMEC 3 G 3

RMME TEAM BRANCH 1 B 3

RBO SME Centre 1 G 3

Branch to process the proposal None of the above 2 S 3


at their end

Other than Mudra Loan 1 & 2 Both 4 A 3

Govt. Sponsored Scheme None of the above 1 A 3

Branch Risk Rater at SME 4 A 3


Centre

Branch None of the above 1 A 3

Page 8
SME CREDIT DELIVERY MODEL

36 An SME Centre is headed by Chief Manager Branch


Manager with one Manager (Sanction)
(Sanction) posted for sanction of
SME advances. Who will sanction
the proposal falling above the
financial power of Manager
(Sanction)?
37 A SME proposal of Rs.40 lacs has RBO Head of
been sanctioned by CM (Sanction) RASMEC
at RASMEC. To whom it will be
submitted for control?
38 Who is responsible for monitoring of GSSAMT Chief Manager
SME advances of Rs.20 lacs (Sanction)
processed by SLAMT at SME
Centre?
39 Who is responsible for monitoring of GSSAMT Chief Manager
SME advances of Rs.30 lacs under (Sanction)
Govt. Sponsored Scheme at SME
Centre?
40 Who is responsible for followup of Chief Manager GSSAMT
irregular SME advances of Rs.10 (Sanction)
lacs under Govt. Sponsored
Scheme at SME Centre?
41 Who is responsible for followup of SLAMT Chief Manager
irregular MUDRA Loan of Rs.5 lacs (Sanction)
under Govt. Sponsored Scheme at
SME Centre?
42 Who is responsible for followup of Chief Manager GSSAMT
irregular SME advances of Rs.20 (Sanction)
lacs other than Govt. Sponsored
Scheme at SME Centre?
43 Who is responsible for Hard SAR Branch Collection Team
recovery action for loan below at SME Centre
Rs.10 lacs at SME Centre?
44 Who is responsible for Hard SAR Branch Collection Team
recovery action for loan above at SME Centre
Rs.10 lacs at SME Centre place?
45 A SME advances of Rs.40 lacs Transfer the Handover to
handled at SME Centre has turned account to Collection Team
NPA. Accordingly, SME Centre linked SAR
decided for recovery action. What Branch
has to be done with the account for
proper recovery action?
46 At RASME Centre, who will GSSAMT Chief Manager
process the SME Advances (Sanction)
proposal for Rs.10 lacs?
47 Who is responsible for Hard SAR Branch Collection Team
recovery action for loan below at RASMEC
Rs.10 lacs at RASME Centre?

Page 9
SME CREDIT DELIVERY MODEL

RBO Head of SME Centre 4 S 3

Branch Manager None of the above 2 S 3

Chief Manager (Loan SLAMT 4 M 3


Administration)

Chief Manager (Loan SLAMT 1 M 3


Administration)

Chief Manager (Loan SLAMT 2 G 3


Administration)

Chief Manager (Loan GSSAMT 4 M 3


Administration)

Chief Manager (Loan SLAMT 4 M 3


Administration)

Chief Manager (Sanction) SLAMT 2 A 3

Chief Manager (Sanction) SLAMT 1 A 3

Handover to Branch None of the above 1 S 3

Branch AMT at RASMEC 4 G 3

Chief Manager (Sanction) Branch 2 M 3

Page 10
SME CREDIT DELIVERY MODEL

48 Who is responsible for Hard SAR Branch Collection Team


recovery action for loan above at RASMEC
Rs.10 lacs at RASME Centre place?

49 What is the role of Maintenance Cell Custody of Follow up of


at RASMEC with respect to SME executed SME advances
Advances? Documents
50 What is the role of Collateral and Preparing, Safe custody of
Documentation Cell at SME Centre? execution and executed
verification of documents
loan
documentation
51 Who is responsible for additional Branch Head Chief Manager
assessment of proposal handled by (Sanction)
RMSE AMT at SME Centre place?

52 Who is responsible for additional Branch Head Chief Manager


assessment of proposal handled by (Sanction)
RMSE AMT at RASME Centre
place?
53 Who is responsible for additional Chief Manager Head of SME
assessment of proposal handled by (Sanction) Centre
RMME AMT at SME Centre place?

54 Who will do the CRA validation of Risk Rater at Risk Rate at SME
RMSE's proposals at SME Centre RBO Centre
Places?
55 Who will do the CRA validation of Risk Rater at Risk Rate at SME
RMSE's proposals at Non-BPR RBO Centre
Centre?
56 Whether AGM SME Centre will be a Yes. He will be Yes. He will be a
member of RCC? a non Mandatory
mandatory Member
member
57 Who will handle the documentation RMSE AMT Branch
of loan proposals handled by RMSE
at SME Centre places?
58 Who will be responsible for CERSAI RMSE AMT Branch
charge creation for loan proposals
handled by RMSE at SME Centre
places?
59 Who will be responsible for RMSE AMT Branch
disbursement of loan handled by
RMSE at SME Centre?
60 Who take the decision regarding Branch RMSE and Head
referred cheques / temporary SME Centre
overdraft in the advances accounts
handled by RMSE AMT at SME
Centre places?

Page 11
SME CREDIT DELIVERY MODEL

Chief Manager (Sanction) Branch 1 M 3

Sanction of advances None of the above 1 M 3

Visit of collateral site All the above 4 A 3

Head of SME Centre RBO 3 M 3

Head of SME Centre RBO 1 M 3

RBO Branch Head 4 M 3

Branch Head None of the above 2 B 3

Branch Head None of the above 1 B 3

No None of the above 3 B 3

Collateral and Documentation RBO 3 M 3


Cell at SME Centre

RBO Collateral and 4 M 3


Documentation Cell at
SME Centre

RBO Collateral and 1 B 3


Documentation Cell at
SME Centre
RBO SME Centre 2 A 3

Page 12
SME CREDIT DELIVERY MODEL

61 Who will prepare the irregularity RMSE AMT Branch


report for the accounts handled
under Sales Hub Model by RMSE
AMT at SME Centre places?
62 Who is responsible for handling end Branch RMSE AMT
to end management of loans above
Rs.50 lacs to Rs.5 crore at SME
Centre places under SME Delivery
Model?
63 Who is responsible for handling end RMME AMT RMSE AMT
to end management of loans above
Rs.5 crore at SME Centre places
under SME Delivery Model?
64 Who is responsible for additional RASMEC RMSE AMT
assessment of the loan proposal
processed by RMSE Team at
RASMEC places?
65 Who will sanction the SME loan Branch Head RMSE AMT
proposal of Rs.50 lacs at Non-BPR
Branch headed by Chief Manager?
66 Upto what advances limit, a Rs.1 crore Rs.3 crore
greenfield project proposal will be
processed by RMSE at Non-BPR
Centre?
67 At a Non-BPR Centre, no RMSE Branch Linked RMME
Team has been posted. Branch has Team
received a SME proposal of Rs.2
crore. Who will process the
proposal?
68 What is the threshold limit for Above Rs.1 Rs.3 crore
RMMEs at Non-BPR Centre where crore
RMSEs have been posted?
69 What is the threshold limit for Above Rs.1 Rs.3 crore
RMMEs at Non-BPR Centre where crore
RMSEs have not been posted?
70 Who will validate CRA of RMME's Risk Rater at Risk Rating
proposal falling under the financial RBO Validating
power of ZCC? Committee at
Zonal Office
71 I- probe search is mandatory for all Rs.1 crore and Rs.25 Lacs and
loans of _______? above above
72 Capital mentioned in the Balance Chartered Company
Sheet of a company can be verified Accountant
from _______.
73 Net profit declared by a unit can be Income tax Company
verified from _______. return and
other related
documents
submitted to IT
Authorities.

Page 13
SME CREDIT DELIVERY MODEL

SME Centre RBO 1 A 3

RBO SME Centre 2 B 3

RBO SME Centre 1 B 3

RBO Branch Head 4 B 3

RBO RMME AMT 1 B 3

Rs.2 crore Rs.5 crore 3 M 3

RBO None of the above 2 S 3

Rs.2 crore Above Rs.5 crore 4 B 3

Rs.2 crore Above Rs.5 crore 1 G 3

Chief Manager (Credit & NPA) None of the above 2 M 3

Rs.1 Lac and above Rs.10 Lac and above 4 B 3

Balance Sheet available with None of the above 3 B 3


Registrar of companies

Chartered Accountant None of the above 1 B 3

Page 14
SME CREDIT DELIVERY MODEL

74 CRILC stand for ______. Central Credit Central


Information Repository of
Companies Information on
Large Credit
75 Who are authorised to publish the Reserve Bank Banks
list of Willful Defaulters at periodic of India
intervals?
76 Whether security offered by a No it can not be It can be
company to other company can be accepted accepted if it is
accepted without restriction? not precluded
under Section
185 of the
Companies Act
77 Domestic Sales Turnover given in VAT / GST Softex
the Balance Sheet of a company Return Declaration Form
can be verified from _______.
78 How many Credit Information 1 2
Company’s (CICs) reports are
required to be obtained for
unsecured loan of Rs.5 lacs under
SME?
79 In case of KYC of proprietorship Two documents Bank has the
concerns, which of the undernoted are required in discretion to
statements is/ are true: the name of the accept one of the
proprietorship documents as
concern activity proof
towards proof subject to contact
of activity point verification
towards the
satisfaction of the
Bank.

80 Opinion reports need not be Constituents For Loans


compiled in which of the following with personal against Bank’s
cases: overdrafts own fixed
against deposits.
government
securities,
company
debentures or
shares, units of
mutual funds,
life insurance
policies, etc.

81 The property of an HUF can be Only for the Can be charged


charged in which of the undernoted beneficial for a credit facility
case: interest/ granted to a third
necessity of the party.
family.

Page 15
SME CREDIT DELIVERY MODEL

Central Report India Limited None of the above 2 M 3


Company

Central Government Credit Information 4 M 3


Companies

Yes it can be accepted without None of the above 2 M 3


any restriction

Tax Audit Report Income Tax Return 1 M 3

3 4 2 A 3

No documents required Both 1 & 2 are correct 4 A 3

Both 1 & 2 None of the above 3 A 3

Can be charged for a credit Creating charge over 1 A 3


facility granted to a third party property of HUF is not
after obtaining opinion from advisable.
Legal Department.

Page 16
SME CREDIT DELIVERY MODEL

82 In the Credit Information Report Absolute Rating only


shared with other Banks, the net amount
means of the entity is to be shared
in the form of _______?
83 Pre-screening of new proposal from If Fund Based If Fund Based +
M/s. Cubictree Technology estimated Non Fund Based
Solutions Pvt. Ltd. (CTSPL) is exposure is estimated
mandatory for which exposure Rs.5 crore and exposure is
level? above. above Rs.10
crore.
84 In which cases the statement of New Loans Existing Loans
assets and liabilities is required to rated SB-9 and rated SB-9 and
be obtained in the form of notarised worse worse
affidavit from the borrower /
guarantor?
85 M/s. Ultra Manufacturing Pvt. Ltd. Certificate of Memorandum &
approached one of the branches of incorporation Articles of
our Bank for sanction of credit Association
facilities. Which of the following
KYC documents are required to be
obtained from the company?
86 In case a Non-lending Bank seeks 1 week 15 days
NOC for opening Current account of
one of our borrowers enjoying credit
facilities with us, the laid down
timeline for conveying our objection/
non-objection as per RBI guidelines
is:
87 The renewal of M/s. Consum Confirmation Signed Copy of
Trading Pvt. Ltd. has fallen due. The should be Audited Balance
company has submitted it Audited obtained from Sheet to be
Balance Sheet as on 31.03.2018. the Chartered obtained
However, the audited Balance Accountant
Sheet is not yet uploaded at the firms who has
website of Ministry of Corporate audited the
Affairs. In such case, what process Balance Sheet
will be followed for independent on phone
verification of audited Balance
Sheet?
88 A partnership firm approached the As the Due diligence, as
Branch for sanction of credit company is applicable to the
facilities' amounting to Rs.2 crore. only having a partners of the
At the time of perusal of partnership share in the unit, is also
deed, it came to the notice of the profit, no due required to be
RMSE processing the proposal that diligence has to done for ABC
a company namely; ABC Ultra be done. Ultra Limited.
Limited, has 20% share in the profit
of the firm but it is not a partner of
the firm. What due diligence RMSE
has to do in this regard?

Page 17
SME CREDIT DELIVERY MODEL

Not to be shared None of the above 2 A 3

If Fund Based + Non Fund If Fund Based + Non 4 A 3


Based estimated exposure is Fund Based estimated
Rs.50 crore and above exposure is Rs.5 crore
and above

All loans under Rehabilitation / All the Above 4 A 3


Restructuring

Proof of identity and address of All the Above 4 S 3


directors, managers, officers or
employees holding an attorney
to transact on its behalf

10 days NOC cannot be 2 S 3


provided in this case.

Independent confirmation None of the Above 3 S 3


should be obtained from the
Chartered Accountant firms
who has audited the Balance
Sheet by email / Fax / Letter.

No due diligence is required None of the above 2 S 3

Page 18
SME CREDIT DELIVERY MODEL

89 A company approaches SME As there is a As it is a credit


Centre for sanction of cash credit CIBIL Default in card default,
limit of Rs.50 lacs. The CIBIL report the name of proposal can be
of one of the promoter director Promoter processed.
shows a default of Rs.50,000/- on Director of the
account of credit card. The company,
company clarifies that it is a proposal
disputed amount and the matter is should be
pending with consumer court with rejected.
related documentary evidence.
What action SME Centre will take
on the processing of the proposal?

90 A borrower have been sanctioned a Opinion report As it is a term


Term Loan of Rs.1 crore for setting is required to loan facility,
up a car service centre in 2016 . be updated opinion report
The borrower's credit rating is SB-9. atleast once in need to be
The opinion report on borrower and a year. compiled only at
guarantor has been compiled at the the time of
time of sanction of credit facility. Is sanction of credit
there any need for updation of facility.
opinion report in this case?

91 M/s. Panta traders, a partnership Yes it can be No it can not be


firm, approached the branch for accepted as accepted as
sanction of credit facility to the tune collateral collateral
of Rs.75 lacs for their retail trading unconditionally
activity. The firm proposes to
provide collateral in the form of
commercial property in the name
another partnership firm 'M/s. Jay
Traders'. Whether commercial
property in the name of M/s. Jay
Traders firm can be accepted as
collateral?
92 For sanction of secured loan of Rs.8 2 1
lacs, credit information report is
required to be obtained from
______ CICs.
93 Which of the following KYC Certificate of A resolution
documents are required to be Registration from the
obtained from a unit registered and Society Society and
under Societies Registration Act for Bylaws power of.
sanction of credit facilities? attorney granted
to its managers,
officers or
employees to
transact on its
behalf
94 Export sales declared in the Chartered Company
Balance Sheet of the unit can be Accountant
verified from _______.

Page 19
SME CREDIT DELIVERY MODEL

Approval from designated None of the above 3 S 3


authority is required to be
obtained regarding
acceptability of the proposal
due to disputed CIBIL default

As the loan is only Rs.1 crore, None of the above 1 S 3


no need to compile opinion
report

Yes it can be accepted as None of the above 3 S 3


collateral only if the partnership
deed of Jay Traders allows for
providing their property as
collateral to third party and all
partners agrees for the same

3 None of the above 2 G 3

Both 1 & 2 None of the above 3 G 3

Sales Tax Return GR Form / Softex 4 G 3


Declaration Form

Page 20
SME CREDIT DELIVERY MODEL

95 KYC guidelines are applicable to Only for some To all borrowal


borrowal accounts
accounts
96 Stages of pre sanction credit Assessment KYC and
process are and sanction appraisal
97 Pre sanction credit process can be 1 2
classified into how many stages?
98 Sanction of credit facilities' within Letter Submission of
the power delegated need to be control reports
reported to higher authorities
by____.
99 Multiple borrowing without Bank's Financial Ne need to
consent is viewed as ________. Indiscipline obtain consent
100 Who is required to do the Appraising Sanctioning
compliance of KYC Norms? authority authority
101 Sanction of loan proposal will be as No structure As per RBO's
per the power structure given in the given by the instruction
______. Bank
102 KYC is carried out verify the identity Bank officials Customer
and profile of the ____.
103 Which of the following KYC Partnership Registration
documents are required to be Deed Certificate
obtained from a partnership unit for
sanction of credit facilities?
104 Who has specified Know Your Government of State Bank of
Customer Standards to be followed India India
by the banks?
105 In order to establish the prima facie Bank's Loan Prudential
acceptability of the loan proposal, Policy and Exposure Norms
which of the following instructions other relevant
need to be followed? guidelines / RBI
guidelines
106 Which of the following is not a step Scrutiny of Search in I-Probe
under due diligence of the borrower Credit
for sanction of credit facilities? Information
Company's
reports
107 From where we will able to get Website of RBI CPPD portal
details of loan rejection by various
branches of the Bank?
108 From where we will able to get Website of RBI RMD portal
details of accounts with CRA
slippage?
109 From where we will able to get Website of Website of RBI
Banned List of Promoters? SEBI

Page 21
SME CREDIT DELIVERY MODEL

Only to deposit accounts None of the above 2 B 3

Appraisal, Assessment and Only Appraisal 3 M 3


Sanction
4 3 4 M 3

not required to be reported None of the above 2 B 3

It is permitted by RBI None of the above 1 G 3

RBO LHO 1 G 3

Scheme of Delegation of Branch 3 B 3


Financial Powers'

Branch RBO 2 B 3

Proof of identity and address of All the Above 4 A 3


all partners

Reserve Bank of India SEBI 3 B 3

CRMD Industry Exposure All the Above 4 A 3


Norms

Opening of Current Account Search in CRILC 3 A 3


database

RMD portal None of the above 2 M 3

CPPD portal None of the above 3 M 3

CPPD portal None of the above 1 M 3

Page 22
PRE SANCTION PROCESS

S.No. Question Choice1 Choice 2 (Max. Choice 3 (Max. 1000


(Maximum 1000 Characters) (Max. 1000 1000 Characters) Characters)
Characters)

1 From where we will able to Website of Ministry of SEBI's website Website of RBI
get List of Disqualified Corporate Affairs
Directors?
2 Audited financial submitted by Audited Financial Audited Financial Audited Financial
the companies should Statement filed with Statement filed with Statement filed with
independently verified with RBI Ministry of Finance Registrar of Companies
which document?
3 Turnover of the unit GST / Sales Tax / ROC RBI
mentioned in the audited Excise returns
financial need to be verified
with _______ .
4 For Project Finance, what Whether project cost Debt / equity gearing Whether critical aspect
types of additional due is prima facie proposed and of project, cost of
diligence is required to be acceptable promoters ability to production, profitability,
done? bring the required etc are prima facie in
capital order
5 Capital mentioned in the RBI Audited Financial GST Return
Balance Sheet of a company Statement filed with
needs to be verified with Registrar of
________. Companies
6 Increase in authorised capital e-form SH-7 filed with GST Return RBI
needs to be verified with ROC
________.
7 A company has declared GR Form GST / VAT Return SEBI
domestic sales turnover of
Rs.50 crore. From which
return it can be verified?
8 A company has export sales GR Form / Softex GST / VAT Return SEBI
turnover of Rs.10 crore. From Declaration Form
which return it can be
verified?
9 Purchases mentioned in the GR Form / Softex SEBI Credit Claim in the
audited balance sheet of a Declaration Form GST / VAT Return
company needs to be verified
with ________.
10 Interest payment to outside Quarterly TDS GR Form / Softex Credit Claim in the
borrowings (other than bank Statement Form Declaration Form GST / VAT Return
borrowings ) by a company No.26Q filed with
needs to be verified with Income Tax
________. Department

Page 1
PRE SANCTION PROCESS

Choice 4 (Max. Right Ans Category( Chapter


1000 Characters) (Numeric) B-Basic, Number
M-Medium, (Numeric)
A-
Advance,
S-
Situational,
G-Grace)

None of the above 1 M 4

None of the above 3 M 4

SEBI 1 B 4

All the Above 4 A 4

None of the above 2 M 4

None of the above 1 M 4

None of the above 2 B 4

None of the above 1 B 4

None of the above 3 B 4

None of the above 1 M 4

Page 2
PRE SANCTION PROCESS

11 Salary and Wages expenses Credit Claim in the PF / ESI / Quarterly TDS
mentioned in the audited GST / VAT Return Professional Tax Statement Form No.24Q
balance sheet of a company Registers / Returns filed with Income Tax
needs to be verified with Department
________.
12 A company has declared net Credit Claim in the PF / ESI / Income tax return and
profit of Rs.2 crore in the GST / VAT Return Professional Tax other related
audited balance sheet. From Registers / Returns documents submitted to
which return it can be IT Authorities.
verified?
13 Income received by a service PF / ESI / ST-3 / GST return SEBI
provider needs to be verified Professional Tax filed with tax
with ________. Registers / Returns authorities
14 Whether scrutiny of financial It is not required as It is not required as Yes. It is one of
of major associates / sister they are separate per Bank's requirement under
concern / subsidiaries is company guidelines financial due diligence
required to be done for of the borrower.
sanction of credit facilities'?
15 What should be ensured at Financials of the Estimated financials No need for verification
the time of verification of concerns should be to be obtained of financials of the
financials of major of a common date. concerns
associates / sister concern /
subsidiaries?
16 A company has approached Declaration regarding Declaration Declaration regarding
us for sanction of credit whether any credit regarding overdue credit facilities availed
facilities. What declaration we facilities in any bank / statutory payment by its associates and
should obtain from them FI / NBFC and their obligations subsidiaries from
before considering the status. banking system
request?
17 In respect of existing Last 2 years Last 3 years Last 1 year
concerns, how many year's
balance sheet required for
considering sanction of credit
facilities?
18 What documents needs to be Income Tax / Wealth Salary slip and Bank Details of movable and
obtained from individual Tax Assessment Account Statement immovable properties.
guarantor for due diligence? Order of last 6 months Details of Liabilities with
its terms and conditions.

19 What documents needs to be Passport and Certification of photo Copy of relevant


obtained for due diligence Resident Visa copies. ID and Proof of certificate / documents
from NRI extending his Residence by Bank establishing them NRI
personal guarantor? officials / Notary
Public / Indian
Embassy
20 A customer has approached Optional Mandatory Not Mandatory
our branch for sanction of
cash credit limit of Rs.11 lacs.
Whether i-Probe search is
mandatory or optional?

Page 3
PRE SANCTION PROCESS

2 and 3 Both 4 A 4

GR Form / Softex 3 B 4
Declaration Form

GR Form / Softex 2 B 4
Declaration Form

None of the above 3 A 4

None of the above 1 A 4

All the Above 4 S 4

No Balance sheet 2 M 4
is required

All the Above 4 A 4

All the Above 4 A 4

None of the above 2 S 4

Page 4
PRE SANCTION PROCESS

21 A retail trading unit was No. It is not required. It is not mandatory. Yes. i-Probe search
enjoying a cash credit limit of should be done to check
Rs.20 lacs with out branch. whether the unit /
The unit closed its account borrower / guarantor is
with full repayment and not linked to any loan in
requested for issue of 'No any branch of the Bank.
Dues Certificate'. Whether the
branch is required to search i-
Probe data before issuing 'No
Dues Certificate'?

22 i-Probe search is mandatory Limit below Rs.10 Limit of Rs.10 lacs Limit of Rs.5 lacs and
for all loans for lacs above
_____________ in the non-
individual category.
23 Report from only one Credit Limit above Rs.10 Limit upto Rs.10 lacs Rs.5 lacs and above
Information Company is lacs
required to be obtained for
_____________ for secured
advances under SME
Segment.
24 Report from only one Credit Limit upto Rs.3 lacs Limit above Rs.3 Rs.5 lacs and above
Information Company is lacs
required to be obtained for
_____________ for
unsecured advances under
SME Segment.
25 Report from two Credit Limit upto Rs.3 lacs Limit above Rs.3 Rs.5 lacs and above
Information Companies is lacs
required to be obtained for
_____________ for
unsecured advances under
SME Segment.
26 Report from two Credit Limit above Rs.10 Limit of Rs.10 lacs Limit of Rs.5 lacs and
Information Companies is lacs above
required to be obtained for
_____________ for secured
advances under SME
Segment.
27 Compilation of opinion report Rs.5 lacs Rs.1 lacs Rs.10 lacs
on borrower and guarantor
has been exempted for SME
advances upto _________.
28 Compilation of opinion report Rs.3 lacs Rs.5 lacs Rs.1 lacs
on borrower and guarantor is
mandatory for advances
above _________.
29 What is the periodicity for No periodicity defined At least once a year Once in 2 years
revision of opinion reports
compiled on borrowers and
guarantors?

Page 5
PRE SANCTION PROCESS

None of the above 3 S 4

Limit of Rs.10 Lac 4 B 4


and above

Limit of Rs.5 lacs 2 B 4

Limit of Rs.5 lacs 1 B 4

Limit of Rs.5 lacs 2 B 4

Limit of Rs.10 Lac 1 B 4


and above

Rs.3 lacs 4 B 4

Rs.10 lacs 1 B 4

None of the above 2 M 4

Page 6
PRE SANCTION PROCESS

30 What precaution we should It should be shared It should be shared The estimated means
take at the time of sharing of only on a specific only on the format should not be stated in
Credit information on our required received in prescribed by IBA. absolute terms. It
constituents with other writing from other should be shared by
banks? banks. way of prescribed
rating.
31 Who has established CRILC? SBI RBI SEBI

Page 7
PRE SANCTION PROCESS

All the Above 4 A 4

ROC 2 B 4

Page 8
ANALYSIS OF FINANCIAL STATEMENT

S.No. Question Choice1 Choice 2 (Max. 1000


(Maximum 1000 Characters) (Max. 1000 Characters)
Characters)

1 Which of the undernoted As far as legal status is It is not necessary to


statements is true with respect concerned both the obtain personal
to a proprietorship concern? proprietorship firm and guarantee of the
proprietor in individual proprietor as proprietor
capacity are considered and his entire personal
as same. assets is liable for any
debt towards
proprietorship firm.
2 For accounting purposes, why There is no need for a A proprietorship firm
a proprietorship firm is proprietorship firm to should prepare the
required to prepare a Balance prepare a balance balance sheet and profit
Sheet? sheet. and loss account of the
firm separately to know
the strength and viability
of the business run by
the firm.
3 What should be verified The total borrowing of The purpose of the loan
through the Articles of the Company is within is within the scope of the
Association of a Company? the authorised object of the Company.
borrowing limit.
4 Which of the statements is/ are It contains the object/ Details of the rights,
true with respect to a purpose of the liabilities, restrictions if
'Partnership Deed'? partnership. any for the partners for
operating the bank
account or borrow.

5 In respect to taxation aspects The Indian Income Tax Partnership firm and its
of a partnership firm, which of Act treats a partnership partners are not taxed
the undernoted statement is firm as a separate seperately.
true? taxable entity.
6 The term 'Joint and Several Proprietorship Firm. Partnership Firm.
liability' is associated with
which of the undernoted
borrowing entity.
7 Which of the undernoted Any partnership A minor has the right to a
statements is/ are correct with agreement by a Minor is share in the property and
respect to 'Minor' as a partner Void. The minor's profits in the firm.
in a partnership firm? guardian has to sign the
deed of partnership on
his/ her behalf.
8 Which statement is true with No registration is Registration for an LLP
respect to registration of an required for an LLP. is optional.
LLP (Limited Liability
Partnership)?

Page 1
ANALYSIS OF FINANCIAL STATEMENT

Choice 3 (Max. 1000 Choice 4 (Max. Right Ans Category( Chapter


Characters) 1000 Characters) (Numeric) B-Basic, Number
M-Medium, (Numeric)
A-Advance,
S-Situational,
G-Grace)
Both 1 & 2 are correct. Only 1 is correct. 3 M 5

Only Profit & Loss Proprietor's detailed 2 B 5


account is required to statement on assets
be prepapred by a and liabilities is
Proprietorship firm. sufficient to access
the status of the firm
for the lender.

Both 1 & 2 are correct. Only 1 is correct. 4 M 5

Conditions relating to All 1, 2 & 3 are 4 M 5


continuation or correct.
dissolution of the
partnertship in the
event of retirement,
death or insolvency of
the partners.
Partners are not None of the above. 1 M 5
required to pay tax.

Private Limited Hindu Undivided 2 G 5


Company Family.

A minor is not All 1, 2 & 3 are 4 A 5


personally liable for correct.
the debts of the firm.

Every LLP must LLP to be registered 3 B 5


register itself with the under the Indian
Registrar of Partnership Act.
Companies.

Page 2
ANALYSIS OF FINANCIAL STATEMENT

9 What is the importance of a The provisions of the Lending banker may not
Trust Deed? Trust Deed relating to get protection if the
borrowing from banks / borrowing by the Trust is
FIs must be interpreted beyond the provisions or
in a very strict sense. authority provided by the
Trust Deed.

10 What is true with respect to Members of the Liability of Members of


liability of members of the Company do not have the Company towards
Company? any liability towards Company's dues is
Company's dues. unlimited.

11 As per Companis Act 2013, It must have a minimum It must have a minimum
what is correct for a Private paid up capital of Rs.1 paid up capital of Rs.2
Limited Company? lakh, a minimum of 2 lacs, a minimum of 2
members and a members and a
maximum of 200 maximum of 100
members. members.

12 How does the Companies Act The new Act defines an The new Act defines an
2013 define an Associate Associate Company Associate Company
Company? (say, A) of another (say, A) of another
Company (say, B) Company (say, B) where
where B exercises B exercises significant
significant control over A control over A (by
(by controlling at least controlling at least 20%
25% of the total share of the total share capital
capital of A, or of the of A, or of the business
business decisions decisions under an
under an agreement). agreement).

13 How is a Dormant Company A company formed and If such a Company has


defined? registered for a future not filed any financial
project, but having no statements and annual
significant account returns during this period
transactions during the to ROC, the new
last two financial years. Companies Act allows
such a Company to
apply before the ROC to
obtain the status of a
Dormant Company.

Page 3
ANALYSIS OF FINANCIAL STATEMENT

Only 1 is correct. Both 1 & 2 are 4 M 5


correct.

The liability of the None of the 3 B 5


members is limited to statements are true.
the extent of their
individual
contributions to the
assets of the
Company.
It must have a It must have a 1 M 5
minimum paid up minimum paid up
capital of Rs.1 lakh, a capital of Rs.5 lacs,
minimum of 2 a minimum of 2
members and a members and a
maximum of 50 maximum of 200
members. members.
The new Act defines The new Act defines 2 A 5
an Associate an Associate
Company (say, A) of Company (say, A) of
another Company another Company
(say, B) where B (say, B) where A
exercises significant exercises significant
control over A (by control over B (by
controlling at least controlling at least
15% of the total share 37.5% of the total
capital of A, or of the share capital of B,
business decisions or of the business
under an agreement). decisions under an
agreement).

Both 1 & 2 are correct. Only 2 is correct. 3 A 5

Page 4
ANALYSIS OF FINANCIAL STATEMENT

14 In respect to a standalone The date of execution of 3 years from Default in


Term Loans, the period of agreement. the payment of any of
limitation is triggered from: the instalments or from
the date of
acknowledgement of
debt/ liability in writing by
the borrowers and the
guarantors or his/her
authorised agents.

15 What are the restrictons for The Bank shall not hold The Bank shall not hold
Banks for holding shares in shares in shares in
companies? any company, whether any company, whether
as pledgee, mortgagee as pledgee, mortgagee
or absolute owner, of an or absolute owner, of an
amount exceeding amount exceeding
thirty per cent of the thirty per cent of the
paid-up share capital of paid-up share capital of
that company or thirty that company or thirty
per cent of its own per cent of its own
paid-up share capital paid-up share capital
and reserves, whichever and reserves, whichever
is less. is more.

16 What is the legal status of the both the proprietorship No question of any legal
proprietor in a proprietorship firm and proprietor in status of proprietor as he
firm? individual capacity are is an individual
considered as same

17 The objectives for which a Certificate of Memorandum of


Company if formed is stated in Incorporation Association
which of the undernoted
documents?
18 The borrowing powers of a Not required to be Certificate of
Company are stated in which stated specifically. Incorporation
of the undernoted documents?

19 If A Ltd has equity capital of B Ltd is the Holding A Ltd is the Holding
Rs. 4 cr out of which B Ltd. Company of A Ltd. Company of B Ltd.
holds shareholding of Rs. 3 cr,
what is the relationship
between Company B &
Company A?

Page 5
ANALYSIS OF FINANCIAL STATEMENT

Within 3 years from Revival letter not to 2 M 5


the date of execution be obtained in
of agreement. respect of a Term
Loan.

The Bank shall not The Bank shall not 1 A 5


hold shares in hold shares in
any company, whether any company,
as pledgee, whether as pledgee,
mortgagee or mortgagee or
absolute owner, of an absolute owner, of
amount exceeding an amount
twenty per cent of the exceeding
paid-up share capital fifteen per cent of
of that company or the paid-up share
thirty per cent of its capital of that
own company or thirty
paid-up share capital per cent of its own
and reserves, paid-up share
whichever is less. capital and
reserves, whichever
is less.

both the None of the above 1 B 5


proprietorship firm
and proprietor in
individual capacity are
considered as
different
Articles of Association Not required to be 2 G 5
formally stated.

Memorandum of Articles of 4 M 5
Association Association

B Ltd & A Ltd are into No relationship 1 A 5


the same line of between these
activity. Companies.

Page 6
ANALYSIS OF FINANCIAL STATEMENT

20 Which of the following Registration with the Partner is not liable for
statement is true in respect to Registrar of Firms is the acts of the firm.
a partnership concern? mandatory.

21 If a minor is inducted as A minor is having the A minor cannot be


partner in a partnership firm, same liability as any inducted as a partner.
which of the undernoted other major partner.
statement is true?

22 Which of the undernoted LLP is to be registered LLP is a separate legal


statement is true with respect with the Registrar of entity which is liable to
to a Limited Liability Firms. the full extent of its
Partnership? assets, but the liability of
the partners is unlimited.

23 In case of variation of 10% 20%


______________ or more in
the valuation proposed by the
valuer and the guideline value
provided in the State
Government notification,
justification on variation has to
be given by the Valuer.
24 In respect of an NPA account a Second opinion on The second
second opinion on valuation is valuation is not required valuation report should
required for which of the in NPA accounts. be obtained only if the
undernoted case? value of loan is Rs 1.00
crore and above.

25 At the time of putting up Less than 6 months old. Less than three years
fixation of reserve price for old.
sale of property under
SARFAESI Act, the valuation
report should be:

Page 7
ANALYSIS OF FINANCIAL STATEMENT

Bank's shall prefer to Partnership firm to 3 M 5


Finance those be registered with
Partnership firms the Registrar of
which are registered Firms within 1 year
with the Registrar of of constitution.
Firms.
Bank does not prefer A minor can be a 4 M 5
to finance a partner of a
partnership firm which partnership firm,
is having a minor as a however he cannot
partner. be held liable
personally for any
debt of the firm.
LLP is not a separate LLP is a separate 4 M 5
legal entity. legal entity which is
liable to the full
extent of its assets,
but the liability of the
partners is limited to
their agreed
contribution in the
LLP.
5% 15% 2 B 5

The second The second 4 M 5


valuation report valuation report
should be obtained should be obtained
only if the value of only if the value of
loan is Rs 50.00 lacs property is Rs 1.00
and above. crore and above in
case of compromise
settlement & fixation
of Reserve Price
under SARFAESI
Act 2002.

Less than one year Less than two years 3 B 5


old. old.

Page 8
ANALYSIS OF FINANCIAL STATEMENT

26 In a credit facility being One TIR needs to be Such a property should


proposed for a Partnership obtained as the loan not be accepted as
firm, a property is offered as a amount is less than Rs. mortgage.
mortgage by Mr. A, one of the 1.00 crore.
partners, which was acquired
by him through a Gift Deed.
The proposed loan amount is
Rs. 80.00 lacs. Which of the
undernoted statement is
correct?
27 Can a property which is owned HUF cannot be owner of Property owned by HUF
by a HUF be accepted for a a property. should not be accepted
mortgage? by the bank.

28 Can a laminated original title If laminated original title Laminated title deeds
deed be accepted for deeds are considered should not be accepted.
mortgage? in exceptional cases,
such cases should be
treated at par with lost
Title Deeds cases and
the process laid down
for the lost Title Deeds
should be followed.

29 Subsequent to creation of EM, Fresh TIR has to In states / UTs where


is a fresh TIR required after obtained every three issuance of EC is not in
every three years? years. vogue, fresh TIR has to
obtained every three
years.
30 A title deed is deposited by the 15.02.2018 17.02.2018
mortgaor on 15.02.2018. What
may be the date of letter of
confirmation taken as part of
EM?
31 If a Company opts not to have Authentication of Company cannot opt not
a common seal, the certain documents by to have a common seal.
Company's Act provides for two directors.
authentication in the following
manner.

Page 9
ANALYSIS OF FINANCIAL STATEMENT

The value of property Two TIRs need to 4 M 5


should be more than be obtained in the
the loan amount instant case.
proposed.

Vetting by Law Officer in view of the legal 4 M 5


mandatory in case of implications
HUF properties. involved, operating
units should
exercise greater
care in mortgaging
properties of HUFs.

Laminated title deeds Laminated title 1 M 5


may be accepted deeds may be
subject to accepted subject to
genuineness clearance by the
certificate by the Law Officer.
advocate.

No requirement of EC needs to be 2 M 5
obtaining fresh TIR obtained every three
after creation of EM. years.

16.02.2018 Either 2 or 3 4 B 5

Authentication of Both 1 & 3 are 4 M 5


documents by a correct
Director and the
Company Secretary,
wherever company
has appointed a
Company Secretary

Page 10
ANALYSIS OF FINANCIAL STATEMENT

32 Under Section 185 of the No exemption is The borrowings of such


Company's Act 2013, a private available to a Private a Company from Banks
limited company has been Limited Company under and financial institutions
granted exemption from the said section. or any body corporate is
compliance subject to the less than twice its paid
clause as stated below: up share capital or Rs.
50.00 crs, whichver is
lower.

33 M/s XYZ Pvt. Ltd. was granted The date of charge is Charge cannot be
credit facilites to the extent of 15.02.2017. created in ROC beyond
Rs. 25.00 crs by SBI and 30 days of creation of
documents executed on charge.
15.02.2017. The charge was
noted with the ROC on
28.03.2017. Which of the
undernoted statement is
correct in this scenario.

34 In respect of ABL & ABL(CRE) Obtention of SME 2 is Obtention of SME 2 &


exposures, which of the waived. SME 4 is waived only in
undernoted statement is states where ad-valerom
correct. stamp duty is applicable.

35 What type of security interests Only mortgages created All types of mortgages
are required to be filed with by deposit of title deeds. created by the Banks.
CERSAI.

36 If the sale deed of a property Registration of POA is It is advisable to obtain a


proposed to be mortgaged has mandatory irrespective written communication /
been executed by a POA of Principal being a confirmation of
holder, the undernoted resident or NRI. Principal to the effect
precaution is required that he / she has granted
the POA,
and that it is still in force.

Page 11
ANALYSIS OF FINANCIAL STATEMENT

Exemption to Private The borrowings of 2 A 5


Limited Company is such a Company
subject to approval from Banks and
from the Company financial institutions
Law Board. or any body
corporate is less
than twice its Net
Worth or Rs. 50.00
crs, whichever is
lower.
If another credit facility If another credit 4 M 5
is taken by the facility is taken by
Company on the Company on
25.02.2017 from BOB 25.02.2017 from
and charge noted by BOB and charge
the said Bank in ROC noted by the said
within 30 days of Bank in ROC within
creation of charge, still 30 days of creation
SBI shall have priority of charge, SBI shall
of charge as loan was loose priority of
sanctioned earlier. charge although
loan was sanctioned
earlier.
SME 2 & SME 4 form SME2 is waived but 2 B 5
an essential part of SME 4 is not
the documentation waived.
process in respect of
ABL.
Hypothecation charge Both 2 & 3 are 4 M 5
on plant and correct
machinery, stocks,
debt including book
debts
Veting from Law No separate 2 M 5
Department not precaution required
required if loan as TIR is taken from
amount is less than panel advocate as
Rs. 1 crore. per extant
instructions.

Page 12
ANALYSIS OF FINANCIAL STATEMENT

37 If a guarantor expires, what is The legal heirs of the Legal heirs can be made
the extent of liability of the guarantor liable only after
legal heirs of the deceased are liable only to the execution of proper
guarantor extent of the estate agreement in this regard.
inherited by them from
the
deceased guarantor
unless they undertake
personal obligation in
their personal
capacities by executing
a separate deed of
guarantee or agreement

38 Documents with respect to a Amount of Stamp duty Stamp duty must be paid
credit facility sanctioned to a payable does not vary for documents executed
partnership firm were executed from state to state. on or before 15.03.2017.
on 15.03.2017. Which
statement is true with respect
to stamp duty payable.

39 In respect of Equitable 12 years from the date 3 years from the date
mortgage, limitation period as of creation of mortgage when the mortgage debt
per limitation act is: falls due, i.e. when a
default takes place and
the Bank makes a
demand on the borrower.

40 Bank is taking an exposure of After obtatining second Second opinion from


Rs. 1.50 crs in M/s ABC & opinion on valuation, another valuer is
Associates, a proprietorship lower of the two to be required before
firm. It is offering one property considered for security proceeding with the
as mortgage which is valued at coverage. proposal.
Rs. 75.00 lacs. Which of the
undernoted statements is
incorrect:
41 If original title deed is lost, Property can be EM cannot be created in
equitable mortgage by certifed accepted if FIR is this case.
copy of the title deed can be lodged in respect of the
accepted in the undernoted lost title deed and notice
sceanario: to be given to public in
two newspapers.

Page 13
ANALYSIS OF FINANCIAL STATEMENT

Legal heirs are liable Legal heirs are not 1 A 5


to the same extent as liable as per
the deceased principle of natural
guarantor. justice

Stamp duty must be Stamp duty can be 2 M 5


paid for documents paid for documents
executed before executed even after
15.03.2017. 15.03.2017 but in
any case before
disbursement.

12 years from the date 3 years from the 3 M 5


when the mortgage date of default.
debt falls due, i.e.
when a default takes
place and the Bank
makes a demand on
the borrower.

Second opinion from Realisable Value to 3 M 5


another valuer is not be considered for
required as the value the purpose of
of property is less security coverage.
than Rs. 1.00 crore.

Prior approval from Both 1 & 3 are 4 M 5


controlling authority correct
required.

Page 14
ANALYSIS OF FINANCIAL STATEMENT

42 For TIRs furnished by the 30 100


Bank's advocate in respect of
PoA sales, in respect of loans
upto an amount of
Rs.__________ lacs, vetting
by bank's law officer can be
waived if such TIR is vetted by
two empanelled advocates.

43 What is the purpose of It is the Hypothecation It is the Supplemental


obtaining SME 2A as a part of Agreement. Hypothecation
SME documentation? Agreement.

44 If a new property is taken as SME 2 SME 7 and SME 8


mortgage at the time of
enhancement of credit
facilities, which documentation
formats are to be used for the
purpose of creation of EM
under SME Documentation?

45 What is the purpose of SME 12 is a link letter SME 12 is not


obtaining SME 12 under SME and is obtained at the prescribed under SME
Documentation? time of shifting from Documentation.
non-SME documents to
SME documentation.
46 If a Company opts not to have Common seal is The company should be
a Common Seal, which of the mandatory. advised to amend its
undernoted statement is Memorandum of
correct? Association to do away
with the common seal
and the requirement of
affixing of common seal.

Page 15
ANALYSIS OF FINANCIAL STATEMENT

50 25 1 B 5

It is a letter which It is required only in 3 B 5


provides for furnishing respect of a
the particulars of all Working Capital
types of assets advance.
acquired out of the
Bank's finance after
the execution of SME-
2.

SME 5 & SME 6 SME 12 2 M 5

SME 12 is the format SME 12 is the TIR 1 B 5


for format.

The company should An application to 3 M 5


be advised to amend this effect must be
its Memorandum and filed with the ROC.
Articles of Association
to do away with the
common seal and the
requirement of affixing
of common seal.

Page 16
ANALYSIS OF FINANCIAL STATEMENT

47 What is the objective of setting CERSAI is a risk The objective of CERSAI


up of CERSAI? mitigation tool for the is to maintain and
Banks / Housing operate a Registration
Finance companies, FIs System for the purpose
and public at large to of registration of
prevent multiple transactions of
financing against the securitisation, asset
same property. reconstruction of
financial assets and
creation of security
interest over property.

48 At the time of accepting a There is no purpose of All chain documents


property as mortgage, how obtaining any chain must be obtained.
many chain documents must document.
be obtained?

49 A new credit facility was No such requirement in A Search Report/


sanctioned to M/s ABC Pvt. the given case. encumbrance certificate
Ltd on 17.02.2018. One for the intervening
property was accepted as period, i.e. from the date
mortgage for securing the said of TIR to the date of
credit facility for which TIR was deposit of original Title
obtained on 15.01.2018. EM Deeds/ creation of EM
was created on 28.02.2018. should be obtained and
What is the additional held on record, as part of
requirement at the time of equitable mortgage
creation of EM? documents.
50 If the mortgagor is a Limited Confirmatory letter need Letter of confirmation is
Company, is letter of not be obtained as in mandatory in all cases
confirmation required at the the case of limited irrespective of type of
time of creation of EM? What companies, the mortgagor.
is the other requirement in mortgage will be
such case? supported by a
resolution passed by the
Board of Directors.
51 What is the significance of Outstanding exposure Bank reserves the
taking Unconditional may be recovered at absolute right to cancel
Cancellability Clause in the any point of time. limits( either fully or
documentation process? partially ) unconditionally
without prior notice

52 Which statement/(s) is/ are It is an Agreement of It is an Agreement for


true with respect to SME 2? Loan cum Guarantee
Hypothecation

Page 17
ANALYSIS OF FINANCIAL STATEMENT

CERSAI serves as a Both 1 & 2 are 4 M 5


medium for creation of correct
charge with ROC.

Where all the original Both 2 & 3 are 4 M 5


chain documents are correct.
not available,
minimum previous two
title deeds should be
obtained along with a
declaration explaining
non availability of the
original title deeds in
respect of past
transactions.

EM cannot be created TIR to be obtained 2 S 5


in the instant case. again before
creation of EM.

The particulars of the Both 1 & 3 are 4 M 5


mortgage / charge correct
also to be filed with
the Registrar of
Companies.

UCC clause is not None of the above 2 M 5


mandatorily to be atatements are
included in the Letter correct.
of Arrangement.

It is obtained for the Both 1 & 3 are 4 B 5


aggregate Limit correct.

Page 18
ANALYSIS OF FINANCIAL STATEMENT

53 What is the purpose of taking It is a Supplemental It is an Agreement for


SME 4? Agreement of Loan cum Loan cum Hypothecation
Hypothecation.
54 Which of the statement /(s) is/ It is a memorandum for It is an internal
are true with respect to SME Recording Creation of document and thus not
5? Mortgage by Deposit of signed by the mortgagor/
Title Deeds (s).
55 At the time of enhancement of Supplemental SME 3 SME 3 not required at
existing facilites or sanction of needs to be obtained. the time of increase in
new facility, what is true with exposure.
respect to SME 3?

56 What is the purpose of It is the Deed of It is a Link Letter.


obtaining SME 9? Mortgage for the
purpose of Registered
Mortgage.
57 Which document under SME SME 3 SME 11
Documentation is used for the
purpose of extension of
Limitation Period?
58 In case of Company, what No such precaution Revival letter not
precaution to be taken while required. required in case of
obtaining SME 11? Company advance.

59 Is Common Seal mandatory in Yes, Common Seal May be taken if


respect to Company needs to be affixed on Company agrees to affix
Documentation? the designated the same.
documents.
60 Is registration of instruments Yes, it is compulsory in No, it is not compulsory
relating to mortgage by deposit all states and Union in all states. One needs
of title deeds compulsory in Territories throughout to refer to the State
the respective sub-registrar the country. Specfic regulations in
office? this regard.
61 In respect of properties sold by 2 TIRs to be obtained if 1 TIR is required to be
Power of Attorney holders to the proposed exposure obtained
our borrower/ guarantor, how is Rs. 1 crore and
may TIRs are required to be above.
obtained?
62 In respect of properties 2 TIRs to be obtained if 2 TIRs to be obtained in
acquired through Gift Deed, the proposed exposure such cases irrespective
how may TIRs are required to is Rs. 1 crore and of loan exposure.
be obtained? above.

63 In respect of all cases where 30 13


loan amount is Rs. 1.00 crore
and above, the advocate has
to make a search of the title of
the property for not less than
______ years.

Page 19
ANALYSIS OF FINANCIAL STATEMENT

It is an Agreement for It is a Link Letter. 1 G 5


Guarantee

Both 1 & 2 are correct. Only 1 is correct. 3 M 5

Fresh SME 3 to be None of the above 3 M 5


obtained for present statements are
aggregate limits correct.
including enhanced
portion.
It is an Agreement for It is an Agreement 1 B 5
Loan cum for Guarantee
Hypothecation

SME 6 SME 10 2 G 5

SME 11 in case of Revival letter must 3 M 5


Company must be be signed by the
supported by a Board key promoter.
Resolution.
Common Seal has None of the above 3 M 5
been made optional statements are
as per Companies Act correct.
2013.
Can be registered as Not required in any 2 B 5
per the will of the of the states/ union
lender. teriitories throughout
the country.

2 TIRs to be obtained 2 TIRs to be 3 B 5


in such cases obtained if the
irrespective of loan proposed exposure
exposure. is Rs. 2 crores and
above.
1 TIR is required to be 2 TIRs to be 2 B 5
obtained obtained if the
proposed exposure
is Rs. 2 crores and
above.
15 20 1 B 5

Page 20
ANALYSIS OF FINANCIAL STATEMENT

64 While inspecting a property, is Selfie of the Inspecting There is no requirement


selfie of the inspecting official official at the site, with of taking a selfie during
required? the borrower, should be property inspection.
taken as an integral part
of inspection and the
same should be kept
with the security
documents.

65 What are the guidelines for Title deeds in vernacular Title deeds in vernacular
accepting a property, whose language not to be language may be
title deeds are in vernacular accepted under any accepted after vetting by
language? circumstances. Law Department.

66 What are the new guidelines Demarcation of property Demarcation of property


regarding demarcation of is not a consideration is not at all important for
property, while accepting the while accepting the its identification and
same as a security? same as mortgage. possible enforcement, if
required at a later date.

67 What is the risk in accepting a The laminated original There is no risk.


laminated original title deed as title document may be a
security? coloured xerox copy,
and original may be
kept with some other
bank.
68 What is the purpose of Checklist on scrutiny of Checklist on
'Annexure F' in the process of TIR by the branches. identification and
accepting an immovable physical verification of
property as a security towards property.
a credit facility being
sanctioned?

Page 21
ANALYSIS OF FINANCIAL STATEMENT

Selfie must be taken Selfie of the 4 B 5


by the Inpecting Inspecting official at
official with all the co- the site, with or
owners of the without the
property. borrower, should be
taken as an integral
part of inspection
and the same
should be kept with
the security
documents.

It the title deeds are in 2 TIRs to be 3 B 5


vernacular language, obtained if title
full particulars of the document is in
title deeds in English vernacular
signed by the Bank's language.
empanelled advocate
should be obtained
and kept on record.

Demarcation of Demarcation of 4 M 5
property may be property is important
considered while for its identification
accepting the same as and possible
mortgage. enforcement, if
required at a later
date. Further, the
property should be
legally accessible
through normal
carriers to transport
goods to factories /
houses, as the case
may be.

Laminated original None of the above 1 B 5


title deeds not to be statements is
accepted under any correct.
circumstances.

Report of Investigation Certificate of title to 2 B 5


of Title in respect of be submitted by the
immovable property. advocate.

Page 22
ANALYSIS OF FINANCIAL STATEMENT

69 What is the purpose of Checklist on Report of Investigation of


'Annexure E' in the process of identification and Title in respect of
accepting an immovable physical verification of immovable property.
property as a security towards property.
a credit facility being
sanctioned?
70 How many title deeds in Obtain all the title deeds Where all the originals
original to be obtained from from the borrower in the are not available,
the borrower? chain of title. minimum previous two
title deeds should be
obtained from the
borrower alonwith a
declaration explaining
non availability of the
original title deeds in
respect of past
transaction to the
satisfaction of Bank
authorities.
71 Which of the statement/(s) is/ The mutation of the The mutation of the
are true with respect of property in the name of property in the name of
mutation of property? the mortgagor is a must. the mortgaor should
normally be insisted
upon. Exemptions
should be satisfactorily
explained and efforts to
be made to ensure the
veracity of the reasons
given by the mortgagor
for non-mutation of the
property.
72 Which of the undernoted step / Direct the advocate to The identity of the
(s) should be taken to prevent procure certified copies borrower should be
mortgage of forged and fake of the title deeds and verified.
documents? compare the certified
copies with the original
documents.

73 What are the precautions Whenever any property Documents evidencing


required in case of creation of is taken a security details of mutation of the
mortgage based on Gift Deed? based on Gift deed as property, utility bills, etc.,
the principal title deed, should be verified to
clearance must be ensure that the gift deed
obtained from the Law was effected and the
Department without fail. actual physical
possession of the
property has passed
from the donor to the
donee.

Page 23
ANALYSIS OF FINANCIAL STATEMENT

Certificate of title to be Checklist on 4 B 5


submitted by the scrutiny of TIR by
advocate. the branches.

Only 1 is correct. Both 1 & 2 are 4 M 5


correct.

Only 2 is correct. Both 1 & 2 are 3 M 5


correct.

Wherever possible the All of the above are 4 M 5


genuineness of the correct.
documents, relating to
the property be got
confirmed from the
concerned local
offices/ authorities.

Both 1 & 2 are correct. Only 1 is correct. 3 M 5

Page 24
ANALYSIS OF FINANCIAL STATEMENT

74 What is the relation between No such relationship The relationship


the owner of the property and exists. between the owner of
the Power of attorney holder? property and the Power
of Attorney holder is that
of Principal and Agent.

75 A title deed was executed on A valid EM can be A valid EM cannot be


15.06.2010 through a Power of created in such case. created in such case.
Attorney holder Mr. P. The
owner of the property, Mr. A,
who gave the power of
attorney to Mr. P, expired on
07.05.2010. Which of the
undernoted statement is
incorrect?
76 Which of the statement/(s) Whenever, agricultural In case of agriculture
is/are correct in respect of land is offered as property proposed for
accepting an Agricultural land security, the TIR must the purpose to secure
as security? cover issues such as non-agricultural
necessary permission advances, the opinion of
for non-agricultural use, Bank's Law department/
or creation of mortgage empanelled advocate
of agricultural land for should be obteined
non-agricultural regarding validity and
purposes. enforceability.

77 Particulars of Equitable 60 45
Mortgage created by
companies/LLPs must be
registered with the Registrar of
Companies within _______
days of their creation as
prescribed by the Companies
Act.
78 Proper due diligence of the Bank’s extant Branches should
mortgagor by branch officials instructions from time to conduct thorough due
is important in ensuring that time in respect of KYC diligence in matters like
there is no fraud in creation of are to be complied in investigation of title to
security. Which of the case of all the properties /
undernoted aspects may be borrowers/mortgagors/ verification of identity of
considered as a part of due mortgagors. borrower and/ or
diligendce? guarantor and more so,
where the mortgagor is
not related to the
business/ family of the
borrower.

Page 25
ANALYSIS OF FINANCIAL STATEMENT

The relationship The relationship 2 B 5


between the owner of between the owner
property and the of property and the
Power of Attorney Power of Attorney
holder is that of Agent holder is that of
and Principal. Bailor and Bailee.
The Power of attorney The said sale 1 S 5
is valid only till the executed through
lifetime of the sale deed dated
principal. 15.06.2010 is an
invalid sale,

Only 1 is correct. Both 1 & 2 are 4 M 5


correct.

30 15 3 B 5

Discreet independent All of the above are 4 M 5


enquiries should be correct.
made regarding
borrower(s) /
guarantor(s) / third
parties, their
credentials and
antecedents from the
neighborhood and
also about the
possession/ownership
etc.

Page 26
ANALYSIS OF FINANCIAL STATEMENT

79 Which type of Security Particulars of creation, Particulars of creation,


interests are required to be modification or modification or
filed on the CERSAI Portal ? satisfaction of security satisfaction of security
interest in immovable interest in hypothecation
property for al types of of plant and machinery,
mortgage. stocks, debt including
book debt or
receivables, whether
existing or future.

80 What precautions / steps to be Where the mortgagor is The mortgage will be


taken if the Mortgagor is a a limited company, the supported by a
Limited Company? confirmatory letter need resolution passed by the
not be obtained. Board of Directors
authorising the
company’s
representative to make
the deposit of title deeds.

81 A Company has changed the No impact Profit will either increase


method of applying or decrease, depend
Depreciation from WDV to upon the case to case
SLM. What will the impact on basis
the profit for the particular year
in which, change happened?

82 Adjusted Tangible Net Worth Net Worth - Investment Net Worth - Intangibles
(TNW) represents the real / in associates /
actual Promoters' Contribution. subsidiaries / JVs etc.
How Adjusted TNW is
calculated?

83 Honest and Company has the Rs. 430 Rs. 490


following credit balances in its
books at the end of FY. What
are the total long term
liabilities? (i) Trade Payables
Rs. 130 (ii) Deferred Tax Rs.
40 (iii) Term Loan Rs. 240
(Due in 4 equal installments)
(iv) Share Premium Rs. 80 (v)
Long Term Provision for
Pension Payment Rs. 210.
84 How many clauses exist in the 12 15
Companies (Auditor's Report)
Order, 2016 ("the order")?

Page 27
ANALYSIS OF FINANCIAL STATEMENT

Particulars of creation, All of the above are 4 M 5


modification or correct.
satisfaction of
security interest in
intangible assets,
being knowhow,
patent, copyright,
trade mark, licence,
franchise or any other
business or
commercial right of
similar nature.
The particulars of the All of the above are 4 M 5
mortgage / charge will correct.
also be filed with the
Registrar of
Companies.

Profit will decrease for Profit will increase 4 A 5


the particular year in for the particular
which, change year in which,
happened change happened

Net Worth - Net Worth - Non 3 A 5


Revaluation Reserve - Current Assets
Intangibles -
Investment in
associates /
subsidiaries / JVs etc.

Rs. 450 Rs. 510 1 A 5

16 21 3 A 5

Page 28
ANALYSIS OF FINANCIAL STATEMENT

85 If the Total of Current Assets is Rs. 26.32 lakh Rs. 25.32 lakh
Rs. 168 lakh and Total Current
Liabilities is Rs. 142.68 lakh,
then what will the amount of
long term funds, which are
supporting the financing of
current assets?

86 Net Working Capital (NWC) Total Current Assets - Long Term Sources -
can be calculated as? Total Current Liabilities Long Term uses

87 Preliminary or Pre-operative Current Assets Fixed Assets


expenses, outstanding
balance in the Balance Sheet
should be classified as?
88 Preparation of Financial To express an opinion Comments on the
Statement is the responsibility on the financial compliance of the
of the management. What are statement various Acts, Accounting
the responsibilities of the Standards etc.
Independent / Statutory
Auditors?

89 Reasons for reduction in Net Losses in business Conversion of current


Working Capital could be? assets into non-current
assets
90 Tandon Committee had 1.28 1.33
prescribed three methods of
lending. What will the current
ratio under 2nd Method of
lending?
91 The average trade receivables No, the unit has to Yes, the working capital
period of a unit has increased manage its receivable in requirement will
from 65 days to 80 days. Is an efficient manner decrease
there any change in the
requirement of working
capital?
92 The Current Ratio of a unit has Investment in fixed Increase in Current
declined from 1.65 to 1.35. assets without availing Liabilities
What could be the possible any Term Loan
reasons for decline?
93 What are cash equivalents? An investment which Any assets which can be
can be realised within a converted into cash
short period of time easily
(upto 90 days) without
deterioration in the
value of assets
94 What is not true about the Reserves are generally Share Premium is not
Reserves? generated out of profits part of Reserves

Page 29
ANALYSIS OF FINANCIAL STATEMENT

Rs. 24.32 lakh Can't be calculated 2 A 5


from the given
information

(Net Worth + Term Any of the above 4 A 5


Liabilities) - (Total
Assets -current
assets)
Non-Current Assets Intangible Assets 4 A 5

Assurance for True All the above 4 A 5


and Fair
representation of
financial statements

Use of short term All of the above 4 A 5


funds for long term
purposes
More than 1.33 It depends on case 2 A 5
to case basis

No, the working Yes, the working 4 A 5


capital requirement capital requirement
will remain at existing will go up
level

A major portion of All of the above 4 A 5


trade receivables
converted into Non-
current assets
Bank Balances Long term 1 A 5
investments

Reserves are part of Share Premium is 2 A 5


Net Worth part of Reserves

Page 30
ANALYSIS OF FINANCIAL STATEMENT

95 What is the difference between Current tax is the No difference, only a


Current Tax and Deferred Tax? amount which is way of presentation of
payable as per IT Act tax amount
whereas deferred tax is
the amount which arises
due to timing difference
and payable /
recoverable in future.

96 What will be the EBIDTA if, Rs. 65.45 lakh Rs. 54.53 lakh
Depreciation is Rs. 12.50 lakh,
Profit Before Tax is Rs. 36.40
lakh, Interest cost is Rs. 16.55
lakh and tax expense is Rs.
10.92 lakh?
97 Which statement is incorrect? Decrease in the level of Increase in the level of
trade payables is inventories is considered
considered as inflow of to be short term use of
cash from operating funds
activities under cash
flow statement

98 Which Statement provides a Profit and Loss Account Balance Sheet


snapshot of the financial
position of the unit at a
particular date and time?
99 While calculating Return on Total Liabilities less Total Assets
Capital Employed (ROCE) intangible assets
ratio, what do you mean by
Capital Employed?
100 Advance given for Non-Current Assets Current Assets
procurement of Machine
should be classified as?
101 After receipt of Audited Confirm about the Preparation of CMA
Financial Statements, the first genuineness of the
action required to be taken by financial statements
the credit officers is?
102 Analysis of Financial Profit and Loss Account Balance Sheet
Statements comprises,
analysis and interpretation of?

103 Deferred Tax Assets are to be Fixed Assets Non Current Assets
classified as?
104 Disclosure for Related Party AS-18 AS-15
Transactions is mandatory on
the Audited Financial
Statements under which
Accounting Standard (AS)?
105 Financial statements are Management of the Government Authorities
prepared for the use of? business concern
106 Form-II of CMA format is Operating Statement Analysis of Balance
named as? Sheet

Page 31
ANALYSIS OF FINANCIAL STATEMENT

Current tax is for current tax is 1 A 5


current year and payable by the unit
deferred tax is for whereas deferred
income, estimated for tax is the amount,
future period which the unit is not
suppose to pay at
all

Rs. 65.55 Lakh Rs. 54.43 Lakh 1 A 5

Infusion of capital is Profit on sale of an 1 A 5


considered to be a old machine is
long term source of classified as cash
funds flow from investing
activities under cash
flow statement

Auditor's Report Non of the above 2 A 5

Net Worth less Promoters own 2 A 5


investment in contribution
associate / JVs etc.

Intangibles Fixed Assets 1 B 5

CRA Rating is to be Discuss the 1 B 5


carried out performance with
the unit

Cash Flow Statement All of the above 4 B 5

Current Assets Intangible Assets 4 B 5

AS-3 None of the above 1 B 5

Shareholders All of the above 4 B 5

Fund Flow Statement Cash Flow 1 B 5


Statement

Page 32
ANALYSIS OF FINANCIAL STATEMENT

107 If the gearing ratio of a unit is Tangible Net Worth of The term liabilities will
less than 1, which statement is the unit will be lower be less than the Tangible
correct? than the Total Outside Net Worth
Liabilities
108 If we have to calculate the cost We have to add the We have to add the
of sale or goods sold, what value of opening stock value of opening stock of
adjustment is required to be of finished goods and SIP and deduct the
done in the cost of production? deduct the value of value of closing stock of
closing stock of finished SIP
goods

109 In the beginning of the Rs. 2.40 lakh Rs. 1.92 lakh
financial year, ABS and
Associates has acquired a
machine at a cost of Rs. 12
lakh. By applying the rate @
20% under WDV method for
charging depreciation, what
will the amount of depreciation
to be debited to P&L account
for the second year?

110 Interest Coverage Ratio is to EBIDTA / Interest PAT / Interest


be calculated as?
111 slow Moving / Non Moving / Current Assets Fixed Assets
Obsolete stocks should be
classified as?
112 Term loans are to be repaid Realisation of fixed Profits
out of future earnings of the assets
unit. Working capital loans are
to be repaid out of
……………….?
113 The long term surplus / deficit Profitability of the unit Excess Money available
in a funds flow statement at Management disposal
depicts?
114 The Raw Materials holding Months' Purchase Months' Cost of
level is compared in terms of? Production

115 What is the full form of Expenses before Earnings before Interest,
EBIDTA? Interest, Depreciation, Depreciation, Tax and
Tax and Amortisation Amortisation

116 Where the Trade Payables will Current Liabilities Term Liabilities
be classified in the Balance
Sheet?
117 Whether Fund Flow Statement No Yes
is part of Financial
Statements?

Page 33
ANALYSIS OF FINANCIAL STATEMENT

Total Outside The term Liabilities 3 B 5


Liabilities of the unit will be more than
will be lower than the the Tangible Net
Tangible Net Worth Worth
We have to add the No adjustment is 1 B 5
value of opening stock required, both are
of finished goods & same
SIP and deduct the
value of closing stock
of finished goods &
SIP
Rs. 1.82 lakh Rs. 1.86 lakh 2 B 5

Cash Accruals / EBIDT / Interest 1 B 5


Interest
Non-current Assets Intangible Assets 3 B 5

Realisaiton of non Realisation of 4 B 5


core assets current assets

Change in Net None of the above 3 B 5


Working Capital

Months' Cost of Sales Months' 4 B 5


Consumption

Earnings before Non of the above 2 B 5


Interest, Deposits with
Bank, Tax and Actual
non operating
expenses
Net Worth Non of the above 1 B 5

May be Many not be 2 B 5

Page 34
ANALYSIS OF FINANCIAL STATEMENT

118 How the sales growth is (Last Year Sales - (Last Year Sales -
calculated? Current Year Sales) / Current Year Sales) /
Last Year Sales Current Year Sales

119 The operating income after Rs. 7.50 lakh & Rs. 6.00 Both will be Rs. 7.15
interest of a manufacturing unit lakh lakh
is Rs. 6.35 lakh. During the
financial year, the unit has
booked a profit of Rs. 1.15
lakh on sale of investment and
amortised Rs. 0.35 lakh. What
will be profit before tax and
profit after tax assuming tax
rate @ 20%?
120 Total Outside Liabilities are? Total Liabilities - Term Total of current and term
Liabilities liabilities
121 What are various sources for Other Current Liabilities, Current Liabilities, Short
financing Current Assets? Short Term Bank Term Bank Borrowing,
Borrowing, Net Working Net Working Capital
Capital
122 What is the formula for Current Assets + Current Assets / Current
calculation of Current Ratio? Current Liabilities Liabilities
123 Which is an example of Copyrights Pre-paid expenses
tangible fixed Assets?
124 Which one of the following is Statutory Dues Payable Long Term Deposits
not a Current Liability? received from dealer

125 While preparing fund flow Short Term Source Long Term Surplus
statement, increase in capital
will be considered as?
126 An example of liquidity ratio Current Ratio Fixed Assets Turnover
is? Ratio
127 Cash Flow Statement consists Operating Activities Investing Activities
the cash flows from the …
activities?
128 Cash margin for issuance of Non-Current Assets Current Assets
LC for purchase of Machine, is
to be classified as?
129 Contingent Liabilities on Asset side Liabilities side
account of disputed tax
liabilities will be shown in the
Balance Sheet under?
130 Cost of Sales can be arrived Cost of Production + Cost of Production +
as? SGA Expenses Non Operating
Expenses

131 If Long Term Uses are more Long Term Surplus Long Term Deficit
than the Long Term Sources,
what will be resultant figure
called?

Page 35
ANALYSIS OF FINANCIAL STATEMENT

(Current Year Sales - (Current Year Sales 4 G 5


Last Year Sales) / - Last Year Sales) /
Current Year Sales Last Year Sales

Rs. 7.15 lakh & Rs. Rs. 6.00 lakh & Rs. 3 G 5
5.74 lakh 4.80 lakh

Total Liabilities - Total Assets -2 G 5


Current Liabilities Current Liabilities
Other Current Current Liabilities 1 G 5
Liabilities, Net
Working Capital

Current Assets - Current Liabilities / 2 G 5


Current Liabilities Current Assets
land & Building Pre-operating 3 G 5
expenses
Term Loan Installment All are current 2 G 5
payable within next liabilities
one year
Long Term Source Any of the above 3 G 5

TOL / TNW ratio None of the above 1 M 5

Financing Activities All of above 4 M 5

Intangible Assets Fixed Assets 1 M 5

As a footnote Both assets and 3 M 5


liabilities side

Cost of Production + Cost of Production + 4 M 5


Opening Stock of SIP Opening Stock of
- Closing Stock of SIP FG - Closing Stock
of FG
Working Capital Gap Non of the above 2 M 5

Page 36
ANALYSIS OF FINANCIAL STATEMENT

132 If we reduce the Non Current Net Working Capital Long Term Surplus
Liabilities from the Non
Current assets, then what we
will get?
133 In the Long Term Debt / EBIDTA as a whole EBIDTA less interest on
EBIDTA ratio, EBIDTA is Term Loans
considered as?
134 Interest Coverage Ratio (ICR) Adjustments Amortization
is calculated by dividing
EBIDTA from Interest
expenses. What does 'A'
represents in EBIDTA?
135 Long Term Sources consist of? Net worth + Term Net Worth
Liabilities
136 One borrower is availing Multiple Banking Consortium Banking
various credit facility from Arrangement Arrangement
various Banks and provided
separate securities to each
Bank on different terms and
conditions. What type of
banking arrangement is this?
137 Out of Operating Profit before Operating Profit after Operating Profit before
Interest/Net Sales and Interest/Net Sales Interest/Net Sales
Operating Profit after
Interest/Net Sales, which is a
better indicator for comparing
two identical units?
138 Profit on sale of investments is Non- Operating Operating Activities
shown in which section of the Activities
Cash Flow Statement?
139 The definition of Current Accounting Standards RBI Master Circular
Assets & Current Liabilities are
available in?

140 Unsecured Loans from friends Current Liabilities Term Liabilities


and relatives, repayable after
one year, should be classified
as?
141 What are the tools, techniques Ratio Analysis Trend Analysis
or methods for analysis and
interpretation of financial
statements?
142 Who is responsible for The Auditors of the The management of the
compliance of various entity entity
Accounting Standards,
Principles, Policies etc. in
preparation and finalising the
financial statements?
143 Who will not be considered as Lenders / Financers Buyers or Suppliers
Related Party for a Company?

Page 37
ANALYSIS OF FINANCIAL STATEMENT

Working Capital Gap Other Current 1 M 5


Liabilities

EBIDTA less interest EBIDTA less interest 3 M 5


on working capital on all borrowings
funds
Accruals Actual income 2 M 5

Current Liabilities + Total Liabilities 1 M 5


Term Liabilities
Sole Banking Any of the above 1 M 5
Arrangement

Both can be used None of the above 2 M 5

Investing Activities Financing Activities 3 M 5

Companies Act 2013 No where available, 3 M 5


current assets are to
be identified as per
prevailing practice

Net Worth Anywhere 2 M 5

Comparison with the All of the above 4 M 5


previous year data

The Shareholders / All the above 2 M 5


Investors

Government All above are not 4 M 5


Departments considered as
Related Party

Page 38
ANALYSIS OF FINANCIAL STATEMENT

144 Why we prepare Fund Flow Its Bank's requirement To know the movement
Statement? of NWC, liquidity,
sources and uses of long
term funds, diversion,
siphoning
145 Working Capital Gap is equal Total Current Assets Net working Capital plus
to? less Net Working other current liabilities
Capital
146 A Company has changed the No impact Cash Accruals will either
method of applying increase or decrease,
Depreciation from WDV to depend upon the case to
SLM. What will the impact on case basis
the Cash Accruals for the
particular year in which,
change happened?
147 A Company has forgot to Earnings will not be Earnings are inflated
record the depreciation in the changes as the
its books. What could be the Depreciation is a non
effects on the earnings of the cash charge
Company?

148 A firm, engaged in the The income generated The income generated
manufacturing of Plastic from investment should from investment should
Bottles, invested Rs. 35 lakh be considered as Non- be considered as
during FY 2015-16 in one of its Operating Income Operating Income
associate concern. During FY
2017-18, the firm has received
an income of Rs. 2.86 lakh
from these investments. What
should be the treatment of this
income while preparing /
validating the operating
statement of the firm?

149 A unit is enjoying CC limit of Yes, as the enhanced No, because the
Rs. 20 lakh and turnover for exposure will be more turnover is less than Rs.
FY 2017-18 was 110 lakh. The than Rs. 25 lakh 200 lakh
unit has approached for
enhancement of Rs. 10 lakh in
CC limit with estimated
turnover of Rs. 150 lakh for FY
2018-19. Whether the Audited
Financial Statements are
required?

Page 39
ANALYSIS OF FINANCIAL STATEMENT

To comply with the To know the 2 M 5


instructions availability of current
assets

Net working capital Other Current 3 M 5


plus Short Term Bank Liabilities plus Bank
Borrowings Borrowings
Cash Accruals will Cash Accruals will 1 S 5
decrease for the increase for the
particular year in particular year in
which, change which, change
happened happened

Earnings will be Depreciation is only 2 S 5


decreased an book entry for
debiting P&L
account and
crediting fixed
assets, therefore will
not impact at all on
earnings
It should not be It is already 1 S 5
considered at all as it considered in the
is not related to the revenue generated
core activity of the firm by the firm,
therefore no
separate treatment
is required

Depends upon the Not at all required 1 S 5


relationship with the
borrower

Page 40
ANALYSIS OF FINANCIAL STATEMENT

150 As on 31.03.2018, Adjusted Rs. 249 lakh Rs. 309 lakh


TNW was Rs. 243 lakh,
Deferred Tax Assets
outstanding was Rs. 6 lakh,
Investment in associates was
Rs. 60 lakh. Work out the Net
Worth of the unit?
151 At the end of FY, the inventory The unit had procured The unit was holding the
holding level of a unit has raw material in bulk to substantial amount of
increased from 69 days to 103 complete the orders finished goods, waiting
days. What could be the for clearance from the
possible reasons for buyers to dispatch the
substantial increase in the material
inventory holding level?
152 In the Cash Flow Statement, The unit is growing very Holding level of
net cash flow from the fast and its current inventories has
Operating Activities is assets requirement is increased substantially
negative. What could be the increasing at a very high
possible reasons for the pace
same?
153 The Cash Credit Limit of a unit Yes No, approval for
was enhanced from Rs. 220 deviation is required as
lakh to Rs. 250 lakh on the enhancement is
30.01.2017. On 11.01.2018, more than 15% within 12
the unit has requested for month from last sanction
enhancement in limit by Rs. 50 or in next renewal,
lakh. Can it be sanctioned whichever is later
without obtaining any approval
for deviation considering that
the request of the Company
otherwise acceptable under all
the parameters?

154 The net tax liabilities for a Deferred Tax Assets Deferred Tax Liability
particular FY as calculated by
the unit is Rs. 163.50 lakh,
whereas the tax payment is
required to be made as per
Income Tax Rules is Rs. 175
lakh for that particular year.
The difference in the tax
liability was on account of
some expenses, which has
been disallowed by the Income
Tax Department. How this
difference of Rs. 11.50 lakh will
be accounted for ?

Page 41
ANALYSIS OF FINANCIAL STATEMENT

Rs. 303 lakh Rs. 177 lakh 2 S 5

The unit has bought All the above 4 S 5


substantial amount of
raw material in the
month of march as the
prices are going
upside

Abnormal delays are All the above 4 S 5


there in realisation of
trade receivables

No need of any None of the above 2 S 5


deviation as the
enhancement is
acceptable in all the
parameters

Will not be accounted Can not say 3 S 5


for at all as the
difference was due to
permanent difference

Page 42
ANALYSIS OF FINANCIAL STATEMENT

155 The net tax liabilities for a Deferred Tax Assets Deferred Tax Liability
particular FY as calculated by
the unit is Rs. 18.60 lakh,
whereas the tax payment is
required to be made as per
Income Tax Rules is Rs. 23.50
lakh for that particular year.
The difference is on account of
rate of depreciation. How this
difference of Rs. 4.90 lakh will
be accounted for ?

156 The Net Worth (Capital and Net Worth will increase Net Worth will decrease
Reserves) of a company as on by Rs. 135 lakh by Rs. 135 lakh
31.03.2017 was Rs. 965 lakh.
During FY 2017-18, the
Company had issued bonus
shares of Rs. 135 lakh, out of
reserves. What will the impact
on net worth of the Company
as on 31.03.2018, assuming
that there will be no fresh
infusion of capital and no other
increase in reserves during FY
17-18?
157 The trade receivables period The competitors in the Sales are increased on
will be impacted under which market have increase the existing terms
scenario? the credit period

158 What could be the reasons for Increase in the level of Decrease in the level of
negative cash flows from Current Assets Current Liabilities
operating activities?
159 What is the inventory holding 1 Month 1.57 Month
period in months for a unit with
sales of Rs. 49.60 lakh,
inventory of Rs. 6.50 lakh, cost
of goods sold Rs. 39.00 lakh
and trade receivables of Rs.
12.40 lakh?
160 What will be the cash accrual Rs. 2 lakh Rs. 18 lakh
of the a unit if, Sales is Rs.
135 lakh, Loss is Rs. 0.10 lakh
and Depreciation is Rs. 8 lakh.
The unit has paid an interest of
Rs. 4 lakh on term loan.?

Page 43
ANALYSIS OF FINANCIAL STATEMENT

Will not be accounted No accounting 1 S 5


for at all and will be treatment is
paid as and when required as we have
asked by the Income to pay tax as per
Tax Department Income Tax rules

Cannot be assessed No impact 4 S 5


from the given
information

Invoicing are now The unit is offering 1 S 5


being done through additional discounts
computers in place of for bulk purchases
manual
Delays in the All the above 4 S 5
realisation of
receivables
3 Month 2 Month 4 S 5

(-) Rs. 2 lakh Rs. 14 lakh 3 S 5

Page 44
ASSESSMENT OF WORKING CAPITAL

S.No. Question Choice1 Choice 2 (Max. 1000


(Maximum 1000 (Max. 1000 Characters)
Characters) Characters)

1 Working Capital is defined Funds required for Funds required for meeting
as? acquisition of current day-to-day operations like
assets generally for a purchase of raw materials,
period of one operating spares & stores, meeting
cycle manufacturing expenses.
2 Gross Working Capital is Funds required for Total of Balance Sheet
better known as setting up of plant

3 Gross Working Capital is Working capital Total Current Assets


also known as Requirement

4 Net Working Capital Long Term Funds, Promoters’ Margin


represents available to support the
short term requirement
of the unit
5 Under Projected Annual 5% of the Projected 5% of the total requirement
Turnover (PAT) method as Annual Turnover
per Nayak Committee
recommendations,
minimum contribution
from the promoters or Net
Working Capital must be
6 For Trade & Services (T Across the board Credit The business enterprises
&S) Sector in C&I segment limit equal to 15% of should be established one
the assessment of credit projected annual and should be at least 2
limit for FBWC Limit upto turnover should be years old.
Rs. 5.00 crores is linked offered to business
with Annual Turnover. enterprises in the T&S
Which one of the following
statement is incorrect in
context of financing to
7 For a manufacturing unit, Trade Creditors only Trade Creditors and
the major source for working capital limits from
financing the current Bank only
assets are:

8 What is the net working 25% of total current 25% of total assets
capital ( margin) assets
requirement under second
method of lending
prescribed by Tandon

Page 1
ASSESSMENT OF WORKING CAPITAL

Choice 3 (Max. Choice 4 (Max. Right Ans Category( Chapter


1000 Characters) 1000 (Numeric B-Basic, Number
Characters) ) M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
Funds required for All of the above 4 B 6
running the
operating cycle

Total funds required Any of the above 3 B 6


to complete an
operating cycle or
total period required
to convert cash into
Total funds required All of the above 4 B 6
to complete an
operating cycle or
total period required
to convert cash into
Short Term Funds Total Working 1 B 6
arranged by the unit Capital less Bank
from market Finance

5% of the Total 25% of the 1 B 6


Current Assets Projected Annual
Turnover

CRA of the unit must An interest rebate 2 M 6


be SB-9 of 0.50% may be
given to
borrowers who
offer mortgage of
property valued
at over 75% of
the credit limit.

Trade Creditors , Trade Creditors, 3 M 6


working capital working capital
limits from Bank and limits from Bank,
Net Working capital Net Working
capital and cash.
25% of working 20% of Projected 1 B 6
capital gap Annual Turnover

Page 2
ASSESSMENT OF WORKING CAPITAL

9 An MSE unit with projected Rs 60.00 Lacs Rs 75.00 Lacs


turnover of Rs 300 Lacs
approaches the bank for
sanction of working capital
limits. What will be the
minimum amount of
working capital Limit to be
assessed for this firm, as
per the guidelines of
Nayak Committee?
10 For Trade & Services ( T Across the board Credit The business enterprises
&S) Sector in C&I segment limit equal to 15% of should be established one
the assessment of credit projected annual and should be at least 2
limit be based upon turnover should be years old.
Annual Turnover, rather offered to business
than on build up of enterprises in the T&S
Inventory and receivables .
Which one of the following
statement is correct in
context of financing
working capital to Trade &
11 Given the acceptable level Rs 500.00 Lacs and Rs 550.00 Lacs and 1.33
of Current Assets at Rs 1.43
1000.00 Lacs and
Projected level of Current
Liabilities other than Bank
Finance at Rs 200.00 Lacs
Working Capital Bank
Finance and Current Ratio,
as per Second Method of
lending ( Tandon
12 The relationship between WCG = NWC+ Bank WCG= Bank Borrowing -
Working capital Borrowing NWC
Gap(WCG), Bank
Borrowing and NWC is as
13 In respect to the NWC = CA-CL NWC= Long Term Sources –
calculation of NWC , which Long term Uses
one of the following is
incorrect

14 Benchmark requirement 25% of the Working 25% 0f Gross Current Assets


for component of Working Capital Finance at peak level during the first
Capital Margin as a part of year of operations
the Project Cost while
financing Term loan is

15 If a company revalues its Will improve Will remain unaffected


fixed assets, the net
working capital, current
ratio and quick ratio of the

Page 3
ASSESSMENT OF WORKING CAPITAL

Rs 45 Lacs Rs 30.00 Lacs 1 s 6

CRA of the unit must The upper cap of 1 A 6


be SB-7 Working Capital
Limit should be
Rs 1.00 crore

Rs 600.00 lacs and Rs 800.00 Lacs 2 S 6


1.25 and 1.00

Bank Borrowing = NWC = Bank 1 M 6


WCG + NWC Borrowing – WCG

NWC= (Capital + NWC= WCG + 4 B 6


Reserves + Long ASSESSED BANK
Term Borrowings) - FINANCE
(Fixed assets+ Non
Current assets )
20% of Total Current There is no 2 M 6
Assets of the first full minimum
year of operations. requirement
level, and it is
linked to Project
Debt Equity ratio
Will undergo some Current ratio and 2 S 6
changes acid ratio will
improve with no
change in NWC

Page 4
ASSESSMENT OF WORKING CAPITAL

16 Under Nayak committee’s 1.33:1 1.25:1


Turnover method for
working capital , the
17 A manufacturing unit has Rs.100 Lacs Rs.50 Lacs
projected its turnover at
Rs5.00 Crores and
requested for a working
Capital of Rs 1.00
Crores ,Under Nayak
Committee method, what
should be minimum level
18 Which one of the following Current Assets-Current Current Assets+ Current
is correct formula to Liability only Liability only
calculate NWC ?

19 As per the Nayak 10% of the Projected 20% of the Projected Annual
Committee annual sales Gross Sales
recommendations, the
minimum working capital
limits to be sanctioned by
Bank is
20 Working Capital Gap Current assets less Current assets less current
means current liabilities liabilities other than short
term borrowing
21 Cash Budget Method of Sugar Industry Tea Oil industry Tea industry,
assessment of WC Limits Industry, Construction construction industry
is used in: Industry
22 Raw Materials holding Months' cost of Months' Cost of Sales
level is compared in terms Production
23 Stock in process holding Months' cost of Months' Cost of Sales
level is compared in terms Production
of :
24 Finished Goods holding Months' cost of Months' Cost of Sales
level is compared in terms Production
25 Trade Receivables holding Months' cost of Months' Cost of Sales
level is compared in terms Production
of :
26 Trade Payable ( Sundry Months' cost of Months' Cost of Sales
Creditor) holding level is Production
compared in terms of :
27 Advance Received from Months' cost of Months' Cost of Sales
customers holding level is Production
compared in terms of :
28 Advance Paid to Suppliers Months' cost of Months' Cost of Sales
of Raw Materials holding Production
level is compared in terms

Page 5
ASSESSMENT OF WORKING CAPITAL

1:1 0.9:1 2 B 6

Rs 40 Lacs Rs25 Lacs 4 S 6

Long term sources- Current Assets- 4 M 6


Long term uses only Current Liability
only , and Long
term sources –
Long term uses
only
25% of the Projected 20% of the Last 2 B 6
annual sales years actual
sales

Fixed assets less Long term 2 M 6


current assets sources minus
long term uses
Sugar Industry Sugar Industry 1 B 6
Coffee Industry, Tea Industry,
Construction Industry Cement Industry.
Months' Purchase Months' 4 B 6
Consumption.
Months' Purchase Months' 1 B 6
Consumption.

Months' Purchase Months' 2 B 6


Consumption.
Months' Purchase 4 B 6
Months' Goss
Sales
Months' Purchase 3 B 6
Months' Goss
Sales
Months' Purchase 4 B 6
Months' Goss
Sales
Months' Purchase 3 B 6
Months' Goss
Sales

Page 6
ASSESSMENT OF WORKING CAPITAL

29 A builder, who is Projected Balance sheet Projected Turnover Method


constructing a Residential Method
Project has approached for
sanction of working Capital
Facility, Which of the
following methods will be
used for assessment of
working capital limit ?
30 The average combined Stock & Receivables Rs Stock & Receivables Rs 6
holding period of RM,SIP & 5 Crs & Rs 10 Crs Crs & Rs 9 Crs respectively
Finished Goods is found to respectively
be 90 days and that of
receivable is found 60
days. The total fund based
working capital limit
arrived for the unit is Rs
15 Crs. What should be the
ideal estimated sub limits
fixed for stock and book
31 While assessing the It is estimated to It is estimated to decline
working capital limit, it decline from current 90 from current 80 days to 65
was observed that level of days to 75 days days
receivables is estimated
to go up from existing Rs
6 Lacs to Rs 9 Lacs,
whereas gross turnover of
the unit is also estimated
to go up from existing
level of Rs 36 Lacs to
Rs.48 Lacs What is the
likely impact on
32 A business unit has been 10.7 11.7
sanctioned cash credit
limit of Rs 15 lac. As at the
month end of December, it
has been carrying stocks
worth Rs 10 lac, Sundry
creditors of Rs 2 lac and
book debts of Rs 7 lac. As
per the sanctioned terms
and conditions, margin of
25% on stocks and 40% on
book debts is stipulated.
Please calculate Drawing
Power assuming that the
sundry creditors estimated
in the appraisal was Rs 3
33 In respect to the 100% 50% interchangeability is
Interchangeability from interchangeability is allowed when the CRA is SB-
Stocks to Book Debts, allowed when the CRA 6 to SB-9
which one of the following is SB-1 to SB-5
statement is incorrect?

Page 7
ASSESSMENT OF WORKING CAPITAL

Cash Budget Method Builder Finance is 3 B 6


not permissible as
per bank`s extant
instructions

Stock & Receivables Stock &4 S 6


Rs 7 Crs & Rs 8 Crs Receivables Rs 9
respectively Crs & Rs 6 Crs
respectively

It is estimated to It is estimated to 3 S 6
increase from current increase from
61 days to 75 days current 61 days
to 68 days

10.2 11.2 2 S 6

25% No 3 B 6
interchangeability is interchangeability
allowed when the is allowed when
CRA is SB-10 & the CRA is SB-10
worse & worse

Page 8
ASSESSMENT OF WORKING CAPITAL

34 Under PBS method, which Computation of working Analysis of the funds flow
of the following statement Capital is based upon planned for the current/next
is not relevant, while the borrower’s year
Assessment of working Projected Balance Sheet
capital

35 The minimum Net 25% of the total current No minimum requirement,


Working Capital under assets to be decided on case to
Projected Balance Sheet case basis considering other
method should be? parameters
36 Under PBS method, which Computation of working Analysis of the funds flow
of the following statement Capital is based upon planned for the current/next
is not relevant, while the borrower’s year
Assessment of working Projected Balance Sheet
capital

37 While assessing the Fund Either as Net worth or Must be knocked off from
requirement of a unit, as Fixed Assets both Net worth and Fixed
Revaluation Reserve, if Assets as it is only a book
any, should be considered entry
as part of ….
38 The FBWC credit 1, lower of the two 5, lower of the two
requirements upto Rs.
……..crores to MSME units
will assessed under
Projected Annual Turnover
(PAT) method as per Nayak
Committee
recommendations. If the
requirement of the unit is
above the requirement as
assessed under PAT
method, the requirement
should be assessed under
both traditional method
based on
production/processing
cycles and the PAT method
and the……………. of the
two assessed limits should
39 The minimum Net Working 25% of the total current No minimum requirement,
Capital under Projected assets to be decided on case to
Balance Sheet method case basis considering other
should be? parameters

Page 9
ASSESSMENT OF WORKING CAPITAL

Examination of the It is necessary in 4 M 6


profitability, financial the PBS method
parameters etc are to fix or compute
done the quantum of
WC finance on
the basis of a
stipulated
minimum level of
liquidity (CR).
25% of the limit 25% of the 3 B 6
sought by the projected
customer turnover

Examination of the It is necessary in 4 M 6


profitability, financial the PBS method
parameters etc are to fix or compute
done the quantum of
WC finance on
the basis of a
stipulated
minimum level of
liquidity (CR).
Net worth only Fixed assets only 2 B 6

5, higher of the two 10, higher of the 3 S 6


two

25% of the limit 25% of the 2 M 6


sought by the projected
customer turnover

Page 10
ASSESSMENT OF WORKING CAPITAL

40 A unit is having following 75 days 135 days


holding periods,RM=30
days,SIP=15days,FG=30d
ays,receivables=60days
and Sundry
Creditors=30days ,what is
the length of working
capital cycle of this unit
41 While arriving at the figure Depreciation Stock in Process
of cost of sales ,which of
the following items is not
accounted for
42 While assessing the It is estimated to It is estimated to decline
working capital limit, it decline from current 90 from current 80 days to 65
was observed that level of days to 75 days days
receivables is estimated
to go up from existing Rs
6 Crs to Rs9 Crs, whereas
gross turnover of the unit
is also estimated to go up
from existing level of Rs36
Crs to Rs.48 Crs. What is
the likely impact on
approximate holding
43 If a company moves from liquidity would increase risk and profitability to
a "conservative" working whereas risk would also decrease
capital policy to an increase
"aggressive"policy, it
should expect
44 Which one of the following manufacturing business can't decide
business needs more
working capital ?
45 Which of the following Making greater use of Making greater use of short
working capital strategies long term finance and term finance and
is the most aggressive? maximizing net short maximizing net short term
term asset. asset.
46 Which one of the following increasing the inventory increasing the account
will increase the operating periods payables period
cycle?
47 Can gaps in the Working partly by the Net No, the Working Capital Gap
Capital Gap be bridged by Working Capital cannot be bridged by
borrowing? (including the borrowing as borrowings
borrower’s own funds cannot form part of the
and long-term capital calculations for a
borrowings) and partly company.
by working capital bank
borrowings.

Page 11
ASSESSMENT OF WORKING CAPITAL

105days 90 days 2 M 6

Finished Goods Selling & General 4 B 6


Expenses

It is estimated to It is estimated to 4 S 6
increase from current increase from
61 days to 75 days current 61 days
to 68 days

expected profitability liquidity to 1 S 6


to increase whereas decrease whereas
risk would decrease expected
profitability would
increase
service providers trading business B 6

1
Making greater use Making greater M 6
of short term finance use of long term
and minimizing net finance and
short term asset. minimizing net 2
decreasing the cash None of these S 6
cycle
1
Yes, the Working No, the Working 1 M 6
Capital Gap can be Capital Gap
bridged by cannot be
borrowing, but only if bridged by
it is short term borrowing as it
would distort the
analysis around
the financial

Page 12
ASSESSMENT OF WORKING CAPITAL

48 Why was the Tandon The calculation was too There was pressure put on
Committee’s measure of old fashioned and the banks by corporates to
Maximum Permissible Indian banks wanted to adopt a more flexible
Bank Finance to calculate adopt a new assessment for working
working capital finance assessment for working capital finance.
changed? capital finance.

49 What is the number of 73 65


inventory days for a
company with sales of INR
500,000, inventory of INR
60,000, cost of goods sold
of INR 300,000 and trade
receivables of INR
50 What is meant by the term The liquidity level The maximum permissible
“excess borrowings” under exceeds the minimum bank borrowings exceed
the Tandon Committee required. current assets.
approach to lending?
51 Which item is evaluated Assets Current Ratio
more substantively when
determining the amount of
financing available to a
company under the
assessed bank finance
method as compared to
the maximum permissible
bank finance method?
52 How is assessing working The banks rely entirely Profitability, liquidity, asset
capital with the cash on the company’s quality, and funds flow are
budget method different? forecast of its income not analyzed.
month on month.

53 How is working capital Short-term sources only Long-term sources only


financed?

54 Why do CMA forms Credit officers and They are very useful in
continue to be used in relationship managers simplifying the
assessment? are familiar with the representation of financial
forms and find them statements, clarifying their
easy to use. content and providing a
clear understanding of the
credit assessment’s

Page 13
ASSESSMENT OF WORKING CAPITAL

Since the Tandon The Maximum 3 A 6


Committee’s report Permissible Bank
in 1975, Indian banks Finance
experienced assessment was
liberalisation and the not producing
Maximum accurate
Permissible Bank outcomes.
Finance assessment
was deemed too
inflexible for modern
72 83 S 6

1
The minimum The amount S 6
required net working borrowed exceeds
capital exceeds the current liabilities.
actual amount. 2
Liquidity Trade Payables M 6

1
Audited accounts are The amount of M 6
not required from the required working
company. capital is
assessed based
on projected cash
flows and not on
projected levels
of assets and 4
It is not material as Combination of M 6
long as working long- and short-
capital is available. term sources 4
Companies are There have been 2 A 6
familiar with the no other forms
information which issued to be used
needs to be entered by the RBI
in the forms and
provide the required
data.

Page 14
ASSESSMENT OF WORKING CAPITAL

55 What is an important Greater variety of There is less emphasis


change in Assessed Bank companies are now able placed on profitability, asset
Finance as compared to to apply for working quality and fund flow.
the Maximum Permissible capital funding because
Bank Finance method? of the Assessed Bank
Finance method.

56 What changes were To scrap the Each bank was given


proposed in 1997 to the requirement to freedom to develop its own
management of working calculate working system of working capital
capital finance? capital finance using finance for a faster credit
the measure of delivery so as to serve
Maximum Permissible various borrowers more

Page 15
ASSESSMENT OF WORKING CAPITAL

The amount of bank Banks are able to M 6


financing is no longer take greater risks
determined on the under Assessed
basis of a stipulated Bank Finance
minimum level of
liquidity, but with
due consideration to
the company’s
overall financial
position and 3
Banks were All of the above A 6
requested to lay
down transparent
policy and guidelines
for credit
dispensation. 2

Page 16
APPRAISAL OF NFB

S.No. Question Choice1 Choice 2 Choice 3 Choice 4


(Maximum 1000 (Max. 1000 (Max. 1000 (Max. 1000 (Max. 1000
Characters) Characters) Characters) Characters) Characters)

1 The Bank Guarantee is Banker and applicant and Banker and Borrower and
a collateral contract, Borrower the beneficiary Guarantor
consequential to a beneficiary
main contract between
the ……….
2 Person to whom the BG Applicant Guarantor Beneficiary Buyer
is given and who has
the right to enforce it,
3 Bank guarantees can Two One Three More than
be classified in ……. Three
Categories
4 BG issued in lieu of Performance Either Financial None of the
advance payment for Guarantee Performance Guarantee above
Raw Material falls or Financial
under….. Guarantee
depending
upon deal
5 Performance BGs 0% 150% 100% 50%
attract Credit
Conversion Factor of….
6 Financial BGs attract 0% 150% 100% 50%
Credit Conversion
Factor of
7 Why proper To increase To increase Both a & b For correct
classification of BGs is BG business commission calculation of
required? Capital
8 Maximum period for 24 months 18 months 36 months Any period
which a BG can be
issued without prior
administrative
9 Normally, BG should 10 7 5 3
not have a maturity of
more than …………
10 Where margin for Need not be Optional Necessary Question of
issuing BG is to be obtained approval does
taken by marking lien not arise as it
on the DP in the cash will constitute
credit account, specific as margin.
approval from the
sanctioning authority is
11 If a bank Guarantee is Asst General Deputy General Chief General
required to be issued Manager General Manager Manager
for a period of 36 Manager
months, Period angle
clearance (PAC)is
required to be obtained

Page 1
APPRAISAL OF NFB

Right Ans Category( Chapter


(Numeric) B-Basic, Number
M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
2 M 7

3 B 7

1 B 7

3 M 7

4 M 7

3 M 7

4 M 7

2 B 7

1 B 7

3 M 7

2 M 7

Page 2
APPRAISAL OF NFB

12 If a bank Guarantee is Asst General Deputy General Chief General


required to be issued Manager General Manager Manager
for a period of 72 Manager
months, Period angle
clearance (PAC)is
required to be obtained
13 What is the % of 50% 110% 25% 100%
margin required for
issuing BG related to
disputed payments
14 Bank guarantees Reserve Bank Indian Banks State Bank of Government
should normally be of India (RBI) Association India (SBI) of India
issued on the standard (IBA)
format issued by
15 When a regular Bank Omnibus SME 5 Counter None of the
guarantee limit is Counter Guarantee above is
sanctioned, which of Guarantee required to be
the following obtained
documents is must
required to be obtained
16 A Bank guarantee of Rs 10000 25000 50000 100000
------------ and above
must be signed by two
Officers
17 Which of the following It need not be It needs to be It needs to be None of the
is correct regarding stamped stamped with stamped above is
Counter Guarantee Rs 10 always correct
18 The appraisal of DPG Cash Credit LC limit Term Loan CEL limit
should be done on the limit Limit
line of
19 BGs can be renewed / Guarantor Beneficiary Applicant No request is
extended at the required, it
request of …….. will be
renewed by
the Bank
20 Can BGs with Yes No Can’t say Yes, only to
automatic renewal select
clause be issued by the beneficiaries
Bank? such as
customs
authority,
courts and
overseas
project
owners in
respect of
21 A BG should be marked 7 15 30 90
off after how many
days of its expiry
22 A separate claim period Having ECR Having ECR Having ECR None of these
can be allowed to AAA AA of Investment
beneficiaries Grade

Page 3
APPRAISAL OF NFB

3 M 7

4 M 7

2 M 7

1 G 7

3 G 7

3 A 7

3 A 7

3 M 7

4 A 7

1 M 7

4 M 7

Page 4
APPRAISAL OF NFB

23 A separate claim 1 3 6 12
period not exceeding
----------- months can be
allowed to select
category of
beneficiaries like
24 Which of the following HDFC ICICI Franklin None of the
mutual fund schemes Templeton above
can be considered as
cash margin for Bank
Guarantee
25 Cash margin prescribed 25% 50% 100% No fixed
for Financial BGs is margin is
prescribed, it
depends on
case to case
basis
26 For participating in a Performance Financial Differed None of the
tender process floated Bank Bank payment above is
by Government Guarantee Guarantee Guaranteecorrect
Department, normally
which type of Bank
Guarantee is required
27 Bank Guarantee issued Performance Financial Differed None of the
on behalf of exporters Bank Bank payment above is
favouring the Customs Guarantee Guarantee Guarantee correct
Department under
EPCG scheme is
categorized under
28 Bank Guarantees Performance Financial Differed None of the
towards revenue dues, Bank Bank payment above is
taxes, duties, levies Guarantee Guarantee Guarantee correct
etc. in favour of Tax/
Customs/ Port / Excise
Authorities and for
disputed liabilities for
litigation pending at
29 Bank Guarantees in Performance Financial Differed None of the
respect of raw material Bank Bank payment above is
supply favoring NSIC Guarantee Guarantee Guarantee correct
on behalf of SME
customers is
30 Retention money Performance Financial Differed None of the
guarantees is Bank Bank payment above is
categorized as Guarantee Guarantee Guarantee correct
31 Units of which one of SBI Debts SBI Magnum SBI Magnum Dual
the following schemes Fund Series Gilt Fund Tax gain Advantage
of SBIMF cannot be Fund
accepted as margin
money for Bank
Guarantee issued by us

Page 5
APPRAISAL OF NFB

2 G 7

4 M 7

4 M 7

1 A 7

1 A 7

2 M 7

2 M 7

1 M 7

3 M 7

Page 6
APPRAISAL OF NFB

32 Units of which one of SBI Equity SBI Magnum SBI Magnum SBI Banking &
the following schemes ESG Fund Tax gain Insta Cash Financial
of SBIMF can be Fund Services fund
accepted as margin
money for Bank
Guarantee issued by us
33 The face value of units 100% of the 110% of the 115% of the 125% of the
accepted as the cash margin cash margin cash margin cash margin
equivalent of cash stipulated stipulated stipulated stipulated
margin for NFB
exposures should be
equal to 125% of the
cash margin stipulated

34 For those Bank Decreased by Increased by Decreased by increased by


Guarantee, where 10 bps 10 bps 25 bps 25 bps
margin money is
tendered by way of MF
instruments, the pricing
35 If a BG issued against only 25% of only 50% of recovered 100% of the
100% cash margin ,the the applicable the only 75% of applicable
charges to be charges are applicable the charges are
recovered is to be charges are applicable to be
recovered to be charges are recovered
recovered to be
36 If a BG issued against only 25% of only 50% of only 75% of 100% of the
50% cash margin ,the the applicable the the applicable
charges to be charges are applicable applicable charges are
recovered is to be charges are charges are to be
37 If a BG issued against only 25% of only 50% of only 75% of 100% of the
40% cash margin ,the the applicable the the applicable
charges to be charges are applicable applicable charges are
recovered is to be charges are charges are to be
38 For Advance Payment 10 % higher 10 % lower 20 % higher Normal
Guarantee ,the charges than the than the than the charges to be
to be recovered should normal normal normal recovered
be charges charges charges
39 Omnibus Counter Bank Official Applicant Beneficiary None of the
Guarantee to be signed above.
by
40 Counter Guarantee to Bank Official Applicant Beneficiary None of the
be signed by above.
41 Which one of the BG will expire Last date of Last date of BG will auto
following is an example on the last lodgement of lodgement of renewed for
of onerous clause date of a claim is same claim is 2 further period
contained in the text of particular as date of month from on date of
a Bank guarantee month expiry of the the date of expiry of BG
BG expiry of the
BG

Page 7
APPRAISAL OF NFB

3 M 7

4 M 7

4 M 7

1 G 7

2 G 7

4 M 7

4 M 7

2 B 7

2 G 7

4 A 7

Page 8
APPRAISAL OF NFB

42 EPCG guarantee is Import target Domestic Export Sales Intra group


issued on behalf of Sales sales
those customers
considering its capacity
43 When a regular bank a unstamped a stamped a unstamped a stamped
Guarantee limit of Rs omnibus omnibus Counter Counter
5.00 Crores is Counter Counter Guarantee Guarantee
sanctioned to a Guarantee Guarantee
customer ,which of the
following additional
document required to
be obtained by the
44 When a single bank a unstamped a stamped a unstamped a stamped
guarantee of Rs 25.00 omnibus omnibus Counter Counter
lacs is to be issued on Counter Counter Guarantee Guarantee
behalf of a customer, Guarantee Guarantee
which of the following
additional document
required to be obtained
by the bank to secure
45 After expiry of the only after Immediately After 7 days Release of
validity of BG, cash return of the of expiry of margin is
margin should be original Bank the Bank Bank’s
released.. Guarantee Guarantee discretion
46 A BG of Rs100000 was PAC is PAC is PAC is No PAC is
issued on 01/09/2017 required from required from required from required as
for 12 months ,however Asst General Deputy Branch BG extension
customer has again Manager General Manager is being done
approached the branch Manager only for 12
on 01/02/2018 itself to months.
extend the validity up
to 31/08/2019.What
course of action is
required by the Branch
Officials related to
Period angle
47 Debt Service Coverage BID Bond EPCG DPG DSCR is not
Ratio(DSCR) should be required for
used as one of the BG
factors while issuing assessment
which type of BG
48 While issuing a Bank BG should be BG should be Bg should be BG should be
Guarantee, which of issued for a issued for a issued in having some
the following is not definite specific respect of onerous
required to be ensured period amount bona fide clauses
by operating units trade
/commercial
transactions

Page 9
APPRAISAL OF NFB

3 A 7

2 M 7

4 S 7

1 M 7

2 S 7

3 A 7

4 A 7

Page 10
APPRAISAL OF NFB

49 As per IBA 2 3 4 None of the


suggestions ,how many above
standard limitation
clause are required to
be inserted at the end
of each BG text
50 In cases where the liability will be liability will liability will None of the
guarantee duly marked off in be marked be marked above action
cancelled is received branch books off in branch off in branch is required
back before the expiry on original books 7 days books
date,what course of expiry date after the immediately
action is required to be original
done regarding liability expiry date
51 In case of invocation of Branch Asstt General Deputy Sanctioning
a bank guarantee, who Manager Manager General authority
is vested with Manager irrespective of
necessary powers for grade
honoring the claims
52 A BG was issued for a 50% of the Only 25% of The No
period of 12 months for original the original commission commission
a specific purpose but commission commission for the can be
the purpose for which it can be can be balance refunded
was issued is over in 6 refunded as refunded period is not under any
months and original BG remaining ,which is the refundable as circum
is returned. The validity is 6 maximum the purpose stances
customer is asking for months. permissible. for which the
refund of commission guarantee
of remaining period was issued
which is 6 months. has been
What course of action fulfilled.
53 A BG is issued on 7 months & 8 months 9 months as 12 months as
16.05.2018 and the 15 days commission commission
validity period is is required to for minimum
31.12.2018,the be recovered period of 12
commission to be on quarterly months is
recovered is for a basis required to be
period of recovered.
54 A BG has been invoked, An Officer not An Officer not An Officer not None of the
which of the following below the below the below the above is
authority authority is rank of DGM rank of GM rank of CGM correct
vested with the power
to stop the payment

Page 11
APPRAISAL OF NFB

3 M 7

3 M 7

1 M 7

3 S 7

2 S 7

4 S 7

Page 12
APPRAISAL OF NFB

55 A BG issued on behalf Concessions Concession Cash margin No further BG


of a customer having may be to be will be to be issued
ECR BBB- is invoked allowed to withdrawn increased by
and account is not continue with and card 5% but
regularized after 20 the prior rates to be further BG
days of invocation, approval of charged issuance will
what course of action is the forthwith but continue
most appropriate as Sanctioning issuance of
per extent guidelines Authority and further BG
issuance of will continue
further BG will
56 Who gives undertaking Issuing bank Nominated Negotiating Advising bank
to the beneficiary for of LC bank under bank under under LC
payment under LC? LC LC
57 Who is the beneficiary Importer Exporter either bank
of the LC? importer or
58 What is complying Documents as Documents Documents All
documents under LC? per LC terms as per as per
UCP600 international
terms standard
banking
practices
terms
59 Who publishes RBI Government ICC Paris DGFT under
UCPDC600 guidelines? of India MoC
60 Standby LC are subject UCPDC600 ISP98 both either
to which guidelines? UCPDC600 or
ISP98
61 While assessing LC Means, Importer/appl Satsifactory All
limit which care need creditworthin icant should track record
to be taken? ess and normally be a of the
standing of constituent applicant
the
62 While issuing LC for the Arrangement Arrangement LC is non None
importer why cash flow of the of the fund based
statement analysis is applicant to exporter how no such
important? retire the bill it is going to assessment
under LC ship the is needed
63 Which is correct LC is fund LC is non LC is a All
statement for the LC? based fund based deffred fund
exposure exposure based
should not be exposure
part of
overall
liabliity of the
64 LC limit of the commensurat Usance should be for All
borrower's and its e with the period of LC genuine
turnover should be turnover and should be in trade of
cash credit consonance goods/service
limit of the of the s
borrower working

Page 13
APPRAISAL OF NFB

4 S 7

1 B 7

2 B 7

4 B 7

3 B 7

4 M 7

4 M 7

1 M 7

4 M 7

4 M 7

Page 14
APPRAISAL OF NFB

65 Interchangeability BG limit can BG limit can No None


within LC and BG limit be utilized for be utilized for interchangea
LC issuance LC issuance bility is of LC
up to 100% up to 100% and BG is
for customer for customer allowed
upto SB9 above SB9
66 Limit of sight LC and should be should be Sight LC and Can be
limit for usance LC same assessed usance LC assessed
issuance combined should be separtely or
togather assessed combined
separately based on the
customer
request
67 What extra care need Whether In F.O.B. LC Applicant/imp ECGC cover
to be taken while beneficiary freight and orter must by the
establishing F.O.B. LC? has taken insurance provide the importer
insurance or has to be copy of the
not paid by the marine
importer so insurance
we should purchased by
ensure the importer
freight
68 What care need to be Goods must LC for goods LC All
taken while issuing LC? be permitted that are aaplication
goods restricted, form should
applicant be properly
must provide stamped
copy of the
69 Which is true for Both import Import LC Import LC All
issuance of LC? and inland LC through should be
should be SWIFT while through
opned inland LC SWIFT while
through should be inland LC to
SWIFT only opened be opnened
manually through SFMS
70 In opinion report on Overseas Line of Creditworthin All
overseas party/supplier party's activity is ess of the
what relevant address and similar to suppier, and
information should be other KYC that of rating
looked for LC based details is as applicant provided by
transaction? per the agency
71 In case of revolving LC Not more Not more Not more None
if total value of improt than Rs1.00 than Rs100 than
is Rs10lakhs and it is lakh Lakhs Rs1crore
expected that LC will
revolve 10times then
what should be value of
outstanding liability
under LC of the
importer at point of

Page 15
APPRAISAL OF NFB

2 M 7

3 M 7

3 M 7

4 M 7

3 M 7

4 M 7

1 A 7

Page 16
APPRAISAL OF NFB

72 While opening the LC Genuine need Fiancials of Minimu 110% All


for non-customer what of the the customer cash margin
care need to be taken? customer to for meeting should be
be the liability taken
ascertianed on the due
73 Select the onerous Sending all All the Issuing LC all
clause under LC which the original transport without
should be avoided to transport documents requirement
be incorporated in the documents to are of submission
LC the importer consigned of transport
directly to documents
74 For negotiation of Corresponden Corresponde Corresponde First class
documents, the LC t bank in case nt bank in nt bank in bank in
must be issued by of foreign or case of case of foreign as
domestic LC domestic LC foreign LC well as inland
while first while first LC
class bank in class bank in
case of case of
75 LC should be opened Government Research Defence All
for genuine and trade owned bodies institution.
transaction only for Educational
customers with regular organization
credit facilities.
Exception to this rule is
LC issued for
76 LC bill discounting is without always with with recourse None
permitted recourse to recouse to to the
the the beneficiary
beneficiary beneficiary but
/exporter documents
under LC
which is
confirmed by
our own
branches
even without
recorse
discounting is
77 To avoid accomodation Bill Past track nature of All
bill discounting under discounting record of transaction
LC what care we should where LC is payment of more
take issued by previous bills particularly if
sister concern under LC both
should be beneficiary
avoided and applicant
are located in
same city or
are related
party

Page 17
APPRAISAL OF NFB

4 A 7

4 A 7

3 A 7

4 A 7

3 A 7

4 A 7

Page 18
APPRAISAL OF NFB

78 You have opened an LC Documents Documents Documents UCP rules are


where last date of can not be should be can be silnet on the
presentation was rejected since rejected by refused as presentayion
21.05.2018. Beneficiary exporter has you since the the last date of documents
presented the presnted the documents of date
documents to its bank documents to has arrived to presentation
on 21.05.2018 who its bank on the issuing is the
immediately send the the last date bank after presentation
document to the of last date of date at
nominated bank who presentation prresentation nominated
recives the documents bank and
on 24th May. Finally the nomintaed
documents arrives to bank has
you(issuing bank). Can received the
you accept such documents
documents for after the last
payment or reject? date of
79 Credit expires on Yes LC should Not Maturity date Take the
21.05.2018. Beneficiary be amended necessary to of draft can consent of
submits the documents with expiry extend expiry not occur the importer
with usance bill with date date provided beyond the
maturity date extended up docuements stated expiry
21.08.2018. Is it to 21.08.2018 are date hence
advisable to extend the presented expiry
expiry date of LC? within extension is
presentation must
80 You have received Document Documents Discrepancy Issuing bank
document under an LC can be can be message can can send
opened by you. You refused at rejected at be send any single notice
have verified the any time any time and number of of rejection.
documents and find before the any number times before Corrected
two discrepancy one expiry date of of times presentation documents
certificate of origin not the LC and within period ends has been
submitted and second hence issuing 5banking day presented
invoice was not signed. bank is right of before the
You have refused the presentation, last of
documents but henece presentation
beneficiary has re- issuing bank and hence
submitted the is right negotiting
corrected documents bank is right
within prsentation in demanding
period.After some time the payment.
you find that port of
loading in the
document is not as per
the LC and once again
refused the documents.
But negotiating bank
has refused the
discrepancy and
demanded the

Page 19
APPRAISAL OF NFB

3 S 7

2 S 7

4 S 7

Page 20
APPRAISAL OF NFB

81 The LC stipulates that Yes since 15th Yes as per No, as per Yes since it is
the last date of August is UCP, if expiry UCP 600 only a force
shipment as 15th national date, expiry date majeure
August 2017. Due to holiday then presentation and last date reason so last
national holiday bill of the last date date, last of date of
lading was issued on of date of negotiation shipment can
16th August 2017. presentation negotiation can be be extended
Exporter has presented can be or shipment extended to
the documents to you extended to date is falling next banking
for negotiation. Can next working on a holiday day if that
you negotiate such day then the date date are
documents? will be falling on a
extended to holiday
next working

Page 21
APPRAISAL OF NFB

3 S 7

Page 22
APPRAISAL OF TL

S.No. Question Choice1 Choice 2 Choice 3 Choice 4


(Maximum 1000 (Max. 1000 (Max. 1000 (Max. 1000 (Max. 1000
Characters) Characters) Characters) Characters) Characters)

1 Term loans can be drawn Lumpsum Instalments Lumpsum or None of the


by the borrower in instalments above
2 Term Loan is an advance Short Period Longer Period Both None of the
generally for above
3 The purpose of term loan Sound - Viable as a Both the above None of the
appraisal is to ascertain Technically,ec commercial above
whether the project is onomically, proposition
financially,
managerially
4 Term Loan is a non fund 1 0
based facility
5 Term Loan is a contingent 1 0
liability
6 Appraisal of term loan for 1 0
a project also involves
examination of prima
facie acceptability of
7 Even though the proposal 1 0
may be prima facie
acceptable, the bank will
call for a comprehensive
application from the
applicant
8 A term loan is an Acquisition of Acquisition of Strengthening All of the
advance for a longer fixed assets balancing of NWC etc above
period intended mainly equipments
9 Term Loans are usually 1 0
sanctioned for 2 years
10 The purpose of term loan Acscertain the Determine the Determine the Ascertain the
appraisal is to ascertain overall rate of interest repayment future
whether the project is viability of to be charged prospects
11 The tenure of term loans 1 7 8 10
shall not normally exceed
…. years
12 The appraisal of term 1 0
loan also involves
examination of
compliance with various
environmental conditions
13 To calculate gross DSCR , 1 0
interest on term loan is
added to both the
numerator and
14 In a term loan proposal, Notional Not Present Net Present All of the
NPV stands for Present Value value value above

Page 1
APPRAISAL OF TL

Right Ans Category( Chapter


(Numeric B-Basic, Number
) M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
3 B 8

2 B 8

3 B 8

2 B 8

2 B 8

1 B 8

1 B 8

4 M 8

2 B 8

1 M 8

4 B 8

1 B 8

1 B 8

3 B 8

Page 2
APPRAISAL OF TL

15 In a term loan proposal, Cost Volume Cost Volume Cost Variation Cost Variation
CVP stands for Production Price Price production
16 The internal rate of Amount of Investment Rate of interest Zero
return is that rate at interest paid quality paid to the
which the sum of the to the bank bank rate at
discounted cash flows or which dividend
net present value is is paid to
17 Higher level of DSCR will Higher Lower Level of DSCR None of the
indicate that the element is not an above
of risk is on the …..side indicator of
18 The information required Fixed Semi Fixed Variable All of the
to calculate Break Even expenses expenses expenses above
analysis is
19 DSCR indicates the Repayment Quantum of Both the above None of the
degree of viability of period annual above
project and is a instalment
determining factor in
20 In the calculation of Sales-variable Depreciation Fixed expenses None of the
break even cost above
point,contribution means
21 In a term loan proposal, Interest ratio Internal rate of Interest rate of Investment
IRR stands for of return return return rate of return
22 Expenses incurred during Pre-operative Preliminary Capital Issue preincorporat
the period between expenses expenses expenses ion expenses
incorporation of the
company and
commencement of
commercial production is
known as
23 ……. of a project means Commercial Technical Financial Managerial
to determine the viablity feasibility Feasibility competency
accuracy of cost
estimates ,suitability of
the envisaged pattern of
financing and general
soundness of the capital
24 Expenses on foreign 1 0
technicians and trainign
expenses if local
technical personnel, can
be included as part of
25 Which of the following is Term Loans Debentures Defferred Internal cash
not a debt component of Payment accruals
the means of financing facilites
26 In a term loan proposal, Equity Debt Equity and or None of the
total cost of the project Debt above
can be financed through

Page 3
APPRAISAL OF TL

2 B 8

4 M 8

2 B 8

4 B 8

3 B 8

1 B 8

2 B 8

1 B 8

3 B 8

1 B 8

4 B 8

3 B 8

Page 4
APPRAISAL OF TL

27 …… must have the Promoters Branches Banker Top


capacity to bring in Management
proportionate additional
contribution to meet any
possible overrun in the
cost of the project
28 Legal charges for 1 0 maybe Only a
registration of land and depending on certain
cost levelling the land the type of portion of
are also part of the cost project leveling cost
29 The technical feasibility suitability of Optimal size of location of the All of the
of a new project should the technology the plant plant above
be examined from the
following angle
30 In a term loan proposal, if Economic Commercial Technical Managerial
the proposal involves a Viability Viability Feasibility competency
new process or new
technology, a ….. Report
by a competent outside
agency is essential
31 The position regarding 1 0 No it is No it is to
demand forecast,supply determine the determine
position and resultant commercial the financial
deamnd supply gap is viability feasibility
examined to ascertain
the economic viability of
the project
32 Important information Industry CMIE/CRIS Risk Mgmt dept All the above
while examining Journals INFAC studies Notes
economic viability can be
gathered from
33 Factors such as end use Optimum size Product Life Demand Supply Accessibility
studies of the project,buy of the plant Cycle position to critical
back agreements, pricing inputs and
policy, import utilities
substitution etc are
examined to ascertain
34 In a term loan proposal , First five years First three First two years First full year
working capital margin years of operations
represents the provision
required to be built into
the cost of a project, at
the peak level during
the…..of operations
35 Various factors such as scale of prima facie technical Environmenta
bank's lending policy, operation acceptability feasibility l suitability
exposure norms ,
industry related risk
factors, list of defaulters
etc are examined to
determine the …. of a

Page 5
APPRAISAL OF TL

1 B 8

1 M 8

4 M 8

3 B 8

1 M 8

4 B 8

3 A 8

4 M 8

2 M 8

Page 6
APPRAISAL OF TL

36 Technical knowhow True 0


fees,engineering and
consultancy fees are part
of the components of the
total cost of the project
37 Preliminary,capital issue True 0
and pre operative
expenses are part of the
components of the total
cost of the project
38 Which of the following is Share capital Internal cash A development None of the
not a source of financing accruals loan from above
the cost of the project government
39 Plant and machinery is True 0
one of the components of
the total cost of the
40 Working capital margin is True 0
one of the components of
the total cost of the
41 IDC is Interest during Investment Interest during Investment
Construction during convergence during
construction conference
42 IDC is part of project cost Yes but to be Yes to be NO it can Yes to be
funded fully funded by never be part funded fully
from equity equity and of project cost from debt
43 Equity Infusion risk is The chances The chances The chances The chances
that the that the that the entire that the
promoters company may may not be tied company
may not be infuse equity up may not be
able to bring into an able to get
in their assoicate the entire
required concern debt
margin after underwritten
commenceme
44 Equity visibility Validation of Upfront equity Stage wise All of the
the sources of equity above
equity
45 Which of the following is Financial Commercial Technical None of the
false feasibiltiy viabiltiy is only feasibiltiy is above
includes about equity about tie up of
vetting of cost infusion risk production
factors
46 Term loans are usually financing of financing finnacing Financing
given for current assets purchase of decrease in purchase of
intangibles share prices fixed assets
47 Which of the follwing is term loans are the tenor term loans term loans
true regarding term loans repaybale ranges from 3 should not be will be
within six to 10 years paid in converted to
months instalments equity
48 Underwriting of is prohibited is prohibited by is one type of None of the
shares/denetures by RBI Banking term assistance above
Reguation Act

Page 7
APPRAISAL OF TL

1 G 8

1 G 8

4 G 8

1 G 8

1 G 8

1 B 8

1 A 8

1 A 8

1 A 8

2 M 8

4 B 8

2 M 8

3 M 8

Page 8
APPRAISAL OF TL

49 Prima facie acceptability Final sanction Examining rejection of the None of the
implies of the required overall loan proposal above
loan accetability of
the proposal in
early stages
50 Which of the factors are Location of Accessibility to Skilled None of the
not considered under plant critical inputs manpower above
technical feasibility
51 Full fledged appraisal is True 0
not required when the
customer requires only
52 Colloboration Technical or Economic or financial or selling or
arrangments generally financial production purchase marketing
53 Estimates of cost needs Over Cost Vetting of cost None of the
to be vetted throughly estimation estimation will will lead to above
primarily because may lead ot also affect accurate
diversion of viability of the estimation of
funds and project working capital
under requirements
estimation subsequently
would result
54 Working capital margin, Net Working Gross Working Total current Promoters
as part of project cost, is Capital Capital assets margin in the
nothing but project
55 Contingency provision 2-5% of the 5-15% of the 5-15% of the 50% of the
could be in the range of firmd up cost firmed up cost non firm cost total project
cost
56 Internal cash accruals Quazi Equity Equity Debt Hybrid
can be considered as
57 Capital subsidy can be Equity Debt Debt or equity Quasi Equity
considered as depending on
timing of
58 Debentures are normally convertible fixed cost non convertible Debt
considered as
59 The primary purpose of ascertain the find out the ascertain the acscertain
calculation of DSCR is to liquidity levels solvency levels viability of the leverage
project levels
60 The life of a project is equal to the the estimated equal to the None of the
life of the duration of its tenure of the above
equipments economically management
productive life
61 Terminal value of the Closing market value residual or WDV of Fixed
project is inventory held of assets at the salvage value assets when
at the time of time of of the assets at the project is
liquidation liquidation of the end of the terminated
the company estimated life
of the project
62 What is true regarding study cushion Degree of It is also called All of the
sensitivty analysis available in resilence CVP analysis above
the project to
withstand
shortfalls

Page 9
APPRAISAL OF TL

2 M 8

4 M 8

2 B 8

1 M 8

1 M 8

1 M 8

3 M 8

2 B 8

1 M 8

4 M 8

3 M 8

2 M 8

3 A 8

4 B 8

Page 10
APPRAISAL OF TL

63 FACR is Fixed Assets Full assets Foreign Assets Fixed Assets


Combined coverage combined ratio Coverage
64 SMCR is WDV of Fixed Secured Secured Security
assets Minimum Maximum Margin
Combined ratio Cover ratio Coverage
65 Moratorium is An Gestation Implementation Non payment
authorisation period period of interest
from the bank during trial
to the run
customers to
postpone
payment
66 Production factors does Manufacturing Technology Labour position Cost
not include process estimates
67 The following formats are FSM 1 2 3 DD , DDS FSMTL-1,2,3 All of the
to be used for monitoring above
of projects
68 Disbursement of term is prohibited can be done Can be done Can be done
loan on reimbursement by RBI for 50% of the after seeking for the entire
basis loan amount approval from amount
sanctioning
authority
69 Which of the following is The project The stipulated The The project
untrue regarding D/E D/E ratio D/E can be propmoters/co D/E ratio
ratio stipulated for changed at mpany should needs to be
the project is any point of infuse equity as finalised as
maintained at time stipulated part of
all times while financial
disbursements feasibility
70 For an estimate dproject 30 lacs 70 lacs 30 lacs 90 lacs
cost of Rs 200 lacs to be
funded at a D/E ration of
70:30, the
company/promoters
need to /nfuse bring in
71 Availability period is Time taken to Stipulated time Stipulated time Stipulated
implement the period within period within time period
project which the loan which by which the
is available for moratorium is entire term
drawdown available loan is to be
repaid
72 For disbursal of NFB 0 1 True provided None of the
facilities to fund a specific above
project, stipulated D/E approval is
ratio need not be taken for
maintained differentiated
margin for
project NFB

Page 11
APPRAISAL OF TL

4 B 8

4 B 8

1 A 8

4 M 8

3 B 8

3 B 8

2 M 8

3 S 8

2 A 8

3 A 8

Page 12
APPRAISAL OF TL

73 The following is not true Stipulated D/E The term loan, Normally, the The term loan
in respect of a term loan ratio needs to after sanction, tenure of the can also be
be maintained can be utilised loan should not relleased on
throughout the for any exceed ten reimburseme
implementatio purpose which years nt basis
n period the borrower
deems fit
74 If Fixed cost is Rs 40, 10 units 4 units 2 units 8 units
Variable cost is Rs 6 per
unit , Selling Price is Rs
10 per unit , what is the
break even point?
75 IRR is Indian Railway Internal rate of Internal Indian Rate of
Return return Recurring Return
76 Internal Rate of Return is Highest return Maximum rate at which rate of
for the project possible return the sum of the interest at
on a term loan discounted which then
cash flows is highest
equal to the return on the
investment project is
77 Debentures are normally equity quasi equity neither debt Debt
considered as nor equity
78 After completing Bank should Bank to accept Bank to All of the
commercial viabilty study reject the loan seek more examine above
for a five year term loan, application collateterla increase in
it is found that and go ahead tenure so as to
Avg,GDSCR is 1.15, then obtain a better
79 During financial Credit anlayst Seek more Credit anlayst None of the
feasibility study, it is to ignore and information on to stop further above
observed that the continue with the sources of work and send
promoters have other the appraisal equity and if rejection letter
commitments/other required
investments in the stipulate
pipeline, then suitable
upfront equity
80 A customer walks in and Go ahead with Adopt a Reject the All of the
seeks a term loan for the appraisal cautious proposal above
putting a new textile mill process. approach , straightaway.
in that area. There are 50 seek further
such mills in that area information
and more than 60% of before taking a
them are sick, then final decision
81 A company seeks a ten Reject the Seek additional Discuss with Increase the
year loan at D/E of 4:1 proposal collaterals the promoters tenure of the
for setting up a paper for a better D/E loan
manufacturing facility; ratio say 2:1.
DSCR is below
benchmark level, then

Page 13
APPRAISAL OF TL

2 M 8

1 B 8

2 B 8

3 M 8

4 B 8

3 S 8

2 S 8

2 S 8

3 S 8

Page 14
APPRAISAL OF TL

82 A company seeks a 3 Prepare a Suggest that Reject the Increase the


year loan for purchasing proposal for short term proposal tenure of the
raw materials and the same loans viz cash straightaway. loan
meeting its day to day credit would be
expenses, then more suitbale
for this
83 A company seeking a Accept the Reject the Take a stand Agree to
term loan for putting up request and proposal that only the consider the
a factory, has included go ahead. straightaway. actual cost of average of
the market value of land will be the two
land , which is several considered. values as
times higher than cost of land.
acquisition cost, in the
project cost. The
company further
suggested that the
market value of land be

Page 15
APPRAISAL OF TL

2 S 8

3 S 8

Page 16
CREDIT RISK ASSESSMENT

S.No. Question Choice1 Choice 2 (Max. Choice 3 (Max.


(Maximum 1000 (Max. 1000 1000 1000
Characters) Characters) Characters) Characters)

1 In case an existing units Exit from the Neither renewal Rating should be
enjoying credit facilities exposure nor downgraded to
from us, fails to pass enhancement is worse of actual
entry barrier, what course possible CRA rating or SB-
of action is required 11
2 Under Credit Risk Financial Risk Operational Risk Business &
assessment Industry Risk
exercise(CRA),Units are
not assessed under which
of the following Risk
3 A proposal for sanction of Projected Projected Projected
various limits of ABC Pvt 31.03.2019 31.03.2020 31.03.2021
Ltd is being undertaken
by appraising Officer in
May 2018.The unit will be
involved in manufacturing
of napkin papers. The
project is likely to start
commercial operation by
31/12/2018.The CRA of
the unit will be based on
which of the following
Financial Statements
4 A unit is having ECR of 67 68 69
BB-,given by rating
agency ICRA. The unit has
got total score 69 under
three parameters namely
Financial Risk,
Management Risk &
Business & Industry Risk
based on audited
financials as on
31/03/2017. What is the
5 A new unit involved in SB-3 SB-4 SB-5
manufacturing of cables
and having total exposure
of Rs3 Crs is rated as SB-4
based on balance sheet
dated 31.03.2017.What
will be final rating of the
unit considering New Unit
6 What is the hurdle rating SB-8 SB-10 SB-11
for New Trading/Non
Trading units under CRA

Page 1
CREDIT RISK ASSESSMENT

Choice 4 Right Ans Category( Chapter


(Max. 1000 (Numeric B-Basic, Number
Characters) ) M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
Penal interest 3 S 9
of 2% is to be
applied

Management 2 B 9
Risk

None of the 2 S 9
above is
correct

70 3 S 9

SB-6 4 S 9

There is no 2 G 9
hurdle rating
for new Units

Page 2
CREDIT RISK ASSESSMENT

7 Credit Risk Assessment C & I Agriculture(AGL) SBF


Models are applicable to
all the following segments
except
8 Forex Risk is a part of Financial Risk Business & Management Risk
which of the following risk Industry Risk
under CRA
9 The CRA rating of a unit Rating will be Rating will be Rating will be
based on the audited retained as retained as SB- downgraded to
balance sheet of SB-12 till 12 till next CRA SB-14
31.03.2017 was SB-12,the 31.03.2018 exercise
account became NPA as
on 31/12/2017,what will
be impact on CRA rating
10 A credit proposal of Rs 35 CRA of the CRA of the unit No CRA is
lacs is being processed unit will be will be done required as limit
under SME SMART SCORE done under under Regular is only Rs 35 lacs
Scheme, choose the best Simplified method
answer from the given method
options

11 CRA simplified model is Rs 1.00 Rs 2.00 Crores Rs 4.00 Crores


applicable for all Crores
exposures above Rs25
Lacs with some exception
and up to Rs.--------
12 Under CRA simplified SB-4 SB-5 SB-6
model, the ratings for new
units has been capped at
13 Which of the following Trade Model Non-Trade Model Construction
models is used only in Model
case of CRA Regular and
not in case of CRA
14 Risk weight assigned for 50% 100% 125%
exposure rated BB- and
below under BASEL II
guidelines
15 The CRA of a unit under It will be It will be It will be
simplified model was upgraded by downgraded by downgraded
calculated based on one notch to one notch to SB- below hurdle rate
audited Financials of SB-7 9 to SB-11
31.03.2017 and rating
was computed as SB-
8.The collateral security
available is 40% .What
will be the impact on final
16 For awarding facility 8 12 10
rating, how many rating
grades have been created

Page 3
CREDIT RISK ASSESSMENT

Personal 4 B 9

None of the 1 G 9
above

Rating will be 4 S 9
downgraded to
SB-16

No CRA is 4 S 9
required as
limit is only Rs
35 lacs and
scoring model
is available for
SME SME
SMART SCORE

Rs 5.00 Crores 4 G 9

SB-7 3 B 9

Services Model 3 B 9

150% 4 M 9

There will not 2 A 9


be any
downgrade as
CRA is not
linked to
collateral
value.

16 4 B 9

Page 4
CREDIT RISK ASSESSMENT

17 Risk weight assigned for 20% 30% 50%


exposure rated A- under
BASEL II guidelines
18 An ECR agency has given Market Risk Systemic Risk Operational Risk
a rating of BBB- to a
company, this is
considered as
19 A customer is enjoying One borrower One borrower One borrower
One cash credit limit, two rating & one rating & two rating & three
term loan ,one BG limit & facility rating facility rating facility rating
one LC limit, which of the
following option is correct
regarding facility rating
20 Credit Risk SB-9& below SB-10& below SB-11& below
Assessment(CRA) to be
reviewed at half yearly
intervals for units having
CRA
21 Prudential norms have Diversion of Mitigation of Risk Concentration of
been prescribed to avoid risk Risk
22 How many modules are 3 4 5
there in the CUE rating
23 For green field Projects Customer Consumer CIBIL Commercial CIBIL
,which of the following information
modules is not applicable
in CUE rating exercise

24 The pricing of the working CRA CUE ECR


capital limit of Rs 50 lacs
is normally linked with
25 For renewal cases, which Financial Current Account Cash Credit
of the following module in Module Module module
CUE will have highest
26 Pillar I under BASEL II Minimum Supervisory Market
guidelines is related with capital Review Process Disclosures
Requirement
27 RAMIP model is used to Constructions Housing Finance Infrastructure
complete the Credit Risk
Assessment (CRA)exercise
of following sector
28 Which one of the following CARE SMERA INFOMERICS
is not one of the approved
external credit rating
agency in India
29 Which of the following Trade Model Non-Trade Model Construction
models is used only in Model
case of CRA Regular and
not in case of CRA
Simplified
30 Under BASEL II guidelines Total Limits Total Outstanding Only on
Capital requirement is sanctioned only Contingent
based on liability

Page 5
CREDIT RISK ASSESSMENT

100% 3 G 9

Credit Risk 4 B 9

One borrower 4 A 9
rating & five
facility rating

SB-15& below 3 M 9

All of the 3 M 9
above
7 4 B 9

Financial 4 M 9
Information

Financial 2 M 9
Soundness

QCA 3 M 9

None of the 1 M 9
above

All of the 3 M 9
above

All of the 4 G 9
above are
approved
rating
All the above 3 G 9
models are
used in both
CRA Regular &
CRA simplified
Risk weighted 4 M 9
Assets

Page 6
CREDIT RISK ASSESSMENT

31 The risk of loss resulting Systemic Risk Credit Risk Operational Risk
from inadequate or failed
internal processes, people
and systems or from
external events is called
32 Customer A and Capital Capital Capital
customer B of a branch is requirement requirement for requirement for
enjoying similar type and for customer customer B is customer A and B
similar amount of limit. A is higher higher than A are similar
The ECR of A & B is BB+ than B
& BBB- respectively,
which of the following
statement is correct
33 A proposal for sanction of Projected Projected Projected
various limits of ABC Pvt 31.03.2019 31.03.2020 30.09.2018
Ltd is being undertaken
by appraising Officer in
May 2018.The unit will be
involved in manufacturing
of moulds. The project is
likely to start commercial
operation by
31/08/2018.The CRA of
the unit will be based on
which of the following
Financial Statements
34 Trigger based dynamic Where total Where total Where total
review is required to be exposure is exposure is exposure is
carried out Rs5.00 Crores Rs10.00 Crores & Rs25.00 Crores &
& above above above
35 Non trigger based Where total Where total Where total
dynamic review is exposure is exposure is exposure is
required to be carried out Rs50.00 Rs100.00 Crores Rs250.00 Crores
Crores & & above & above
above
36 Non trigger based Monthly Quarterly Half yearly
dynamic review is Intervals Intervals Intervals
required to be carried out
37 Based on the Dynamic Downgraded Up graded only Both Downgraded
review, CRA rating can be only & Upgraded

38 Mapping exercise is done Borrower & Internal & Previous year &
to map Facility rating External rating current year
39 For mapping exercise all 2 categories 3 categories 4 categories
the units based on their
exposures are classified
40 Mapping exercise is Quarterly Half yearly Annual Interval
required to be conducted interval interval
at

Page 7
CREDIT RISK ASSESSMENT

Market Risk 3 B 9

None of the 2 S 9
above is
correct

For new units 2 S 9


no CRA is
required

Where total 2 M 9
exposure is
Rs50.00 Crores
& above
Where total 4 B 9
exposure is
Rs500.00
Crores &
above
Annual interval 3 G 9

Neither 1 B 9
Downgraded
nor upgraded
None of the 2 M 9
above is
5 categories 2 M 9

There is no 4 G 9
fixed
periodicity of
mapping

Page 8
CREDIT RISK ASSESSMENT

41 Which one of the following Fitch Moody`s Standard & Poor


rating agency is not an
internationally accredited
rating agency
42 For applicability of Liability Contingent Fund flow
Country Risk under CRA liability
exercise, a certain
minimum percentage of
which of the following
should be situated
43 Under CRA exercise, 15 20 25
Country Risk would be
applicable to units having
Cash flows /Assets to
countries starting from
Medium Risk .What is the
minimum percentage
criteria for this
44 Country Risk Criteria Upgrade both Upgrade only Downgrade both
under CRA exercise is Borrower & Borrower rating Borrower &
used to Facility facility Ratings
Ratings
45 A risk that a borrower will Forex Risk Hedging Risk International Risk
not be able to service its
obligations to pay
because of cross border
restrictions on the
convertibility or
availability of a given
46 Country Risk Ratings are SME CPPD IBG
issued by which of the
following
47 If CRA rating of a unit is Deviation is Deviation is Sanction is
downgraded by two required to be required from a required to be
notches on account of obtained from higher authority obtained from a
coutry risk, then which sanctioning than sanctioning higher authority
one of the following is authority only authority
48 Which one of the following Zero Risk Low Risk High Risk
is not one of the types of
ratings given to a
particular country under
country Risk Criteria
49 Country Risk can be Obtaining Taking ECGC LC from a first
mitigated by all of the advance cover class bank
following except payment
50 A unit has obtained ECR Long Term Short Term rating Medium Term
from CRISIL, which of the rating rating
following type of rating is
used for awarding
additional score under

Page 9
CREDIT RISK ASSESSMENT

Infomerics 4 M 9

Cash flow 4 A 9

50 3 M 9

Down grade 4 M 9
only Borrower
Rating

Country Risk 4 M 9

RMD 3 B 9

Neither 3 S 9
deviation nor
sanction is
required from
a higher
Off Credit 1 G 9

Forward 4 A 9
foreign
currency
perpetual 1 G 9
rating

Page 10
CREDIT RISK ASSESSMENT

51 One of the facilities of a Long Term Medium term Short Term Rating
customer is rated as rating rating
A3,this rating is a
52 Which of the following is RAMIP model Only Borrower Only facility
correct for a construction will be Rating is required rating is required
company having exposure applied to be done to be done
of more than Rs 5 crores
53 The negative effects on Reputational Environment Risk Strategic Risk
capital and earnings due Risk
to business policy
decisions, changes in the
economic environment,
deficient or insufficient
implementation of
decisions, or a failure to
adapt to changes in the
economic environment is
54 The purpose of Risk Avoid Risk Minimize Risk Optimize Risk
management exercise is
55 If a new customer failed Deviation is Deviation is No deviation is
to clear Entry barrier required from required to be envisaged in
under CRA exercise, sanctioning obtained from Entry barrier
authority next higher
56 Which of the following Integrity Compliance of Compliance of
parameters is not one of environment loan policy
the entry barriers to be Regulation and
cleared by borrowers Local laws
under CRA exercise
57 For newly incorporated Audited Projected Provisional
unit where the audited Financial Financials Financials
financials relate to less
than 12 months of
commercial production,
CRA exercise will be done
58 Which of the following CCC=DSO+DI CCC=DSO+ DPO- CCC=DPO+DIO-
best describes the O+DPO DIO DSO
relationship between cash
conversion cycle(CCC)
and Days sales
outstanding(DSO),Days
Inventory
Outstanding(DIO) and
59 A unit total exposure is Annual Half yearly Quarterly Interval
Rs5 Crores and rating is interval interval
SB-12,the CRA exercise is
to be done at
60 For new units to be rated SB-4 SB-5 SB-6
under CRA Regular Non
Trade Model the rating
cap is

Page 11
CREDIT RISK ASSESSMENT

None of the 3 M 9
above is
correct
Both Borrower 4 G 9
& facility
rating is
required to be
Operational 3 M 9
Risk

none of the 3 B 9
above is
None of the 3 S 9
above is
correct

All of the 3 B 9
above are
considered as
entry Barriers

No CRA is 2 G 9
required to be
done in such
cases

CCC=DSO+ 4 A 9
DIO-DPO

None of the 2 G 9
above is
correct

SB-10 2 B 9

Page 12
CREDIT RISK ASSESSMENT

61 For exposures above Rs 31st March Last day of Last date of


50.00 lacs, the CUE rating always previous quarter Previous month in
exercise will be based on in which exercise which exercise is
is being done being done
62 The CUE rating once 12Months 9 months 6 months
validated should not be
reviewed /revised within
how many months from
validation
63 Under Project Vivek CUE PACE tool Consumer Credit
exercise the financials are Bureau Report
redrawn by using
64 CUE ratings are applicable Rs 5 Crores Rs 10 Crores Rs 25 Crores
for maximum exposures
up to
65 Information on borrower’s Commercial Consumer credit Qualitative
conduct of accounts credit bureau bureau (CIBIL) Credit
across all Banks, is (CIBIL ) Assessment
obtained under which of (QCA) module
the following module of
CUE rating exercise
66 Borrower’s related Commercial Consumer credit Qualitative
parties, like partners, credit bureau bureau (CIBIL) Credit
proprietor, directors and (CIBIL ) Assessment
guarantors are analyzed (QCA) module
under which of the
67 Which one of the following Customer Guarantor Financial module
is not one of the modules information information
under CUE exercise module module
68 For a new connection of On-us On-us Cash- Financial module
Rs 1 crores, which of the current credit module
following modules of CUE account
will remain switch off module
69 For all exposure up to Rs On-us On-us Cash- Financial module
50 lacs ,which module will current credit module
mandatorily remain account
switch off module
70 Different types of ratios, Customer On-us Cash- Financial module
as per the latest information credit module
redrawn financials from
the PACE tool, are used
under which module
71 A Credit Rating below Negative hurdle rating Restrictive rating
which hurdle rating) no rating
fresh/enhancement in
existing exposure is
proposed without
obtaining approval from
appropriate authority is

Page 13
CREDIT RISK ASSESSMENT

None of the 3 M 9
above is
correct

3 months 3 B 9

Commercial 2 G 9
credit bureau
(CIBIL
Rs 50 Crores 4 B 9

Financial 1 M 9
information

Financial 2 B 9
information

Credit 2 G 9
Bureau
module
Qualitative 2 S 9
Credit
Assessment
(QCA) module
Qualitative 3 M 9
Credit
Assessment
(QCA) module
Qualitative 3 B 9
Credit
Assessment
(QCA) module

None of the 2 G 9
above

Page 14
CREDIT RISK ASSESSMENT

72 Under Qualitative 10 5 4
Parameter
(ExternalRating)of CRA
exercise the quantum of
maximum score which
73 Cash Credit facilities are Long Term Medium Term Short Term
awarded, which type of
rating by Credit Rating
Agencies
74 If a corporate is having Market Hedge Naturally hedge Artificially Hedge
uncovered receivables to
cover its foreign currency
exposures, then it is
treated as
75 While calculating INR USD EURO
Unhedged foreign
currency
exposure(UFCE),all foreign
currency exposure are to
be converted into which

Page 15
CREDIT RISK ASSESSMENT

3 2 M 9

None of the 1 M 9
above

None of the 2 A 9
above

No conversion 2 A 9
is required,
different
currency
should be
computed

Page 16
PREPARATION OF PROPOSAL

S.No.

1
2

Page 1
PREPARATION OF PROPOSAL

Question
(Maximum 1000 Characters)

Which format will be used for modification in proposal i.e change in T&C/Pricing, Security/Margin etc.
Which format will be used for proposal for exposure above Rs 1 Crore and up to Ra 50 Crores?

Page 2
PREPARATION OF PROPOSAL

Choice1 Choice 2 Choice 3 Choice 4 Right Ans Chapter


(Max. 1000 (Max. (Max. 1000 (Max. 1000 (Numeric) Number
Characters) 1000 Character Characters) (Numeric)
Character s)
s)
Format S2 Format S Format M Format DDS 3 10
Format S2 Format S Format M Format DDS 4 10

Page 3
VARIOUS SME PRODUCT

S.No. Question Choice1 Choice 2 (Max. 1000 Choice 3 (Max.


(Maximum 1000 (Max. 1000 Characters) 1000
Characters) Characters) Characters)

1 As per CGTMSE "Primary The assets Existing unencumbered Both a & b


Security" shall mean : created out of assets which are
the credit facility directly associated with
extended the project or business
for which the credit
facility has been
2 Maximum extent of 85% of the 75% of the amount in 60% of amount in
Guarantee cover ceiling amount in default default subject to
where credit facility is default. maximum of
above Rs 50 lacs and up Rs.120 lakh
to Rs 200 lacs
3 Annual Guarantee Fee Government Bank Equally borne by
(AGF) for Cash Credit Bank and borrower
limit and Term Loan
sanctioned under
CGTMSE have to be
4 Time norm for lodging of 31.01.2018 31.03.2018 30.06.2018
application for
guarantee cover for a
loan sanctioned on
5 With effect from FY respective respective RBO on or respective
2017-18 the Annual operating before May, 31 of every Administrative
Guarantee Fee (AGF) has units/MLIs on or year till the end of the offices on or before
to be paid by before May, 31 of tenure of guarantee May, 31 of every
every year till the cover by debit to year till the end of
end of the tenure borrower’s account or the tenure of
of guarantee Branch Charges A/c, as guarantee cover
cover by debit to applicable. by debit to
borrower’s borrower’s account
account or or Branch Charges
Branch Charges A/c, as applicable.
6 Method of payment of By NEFT/RTGS By Demand Draft only Either of A or B
Annual guarantee fee for only
CGTMSE is
7 No collateral security to Rs 10 lacs Rs 1 Lac Rs 5 Lac
be obtained for all Micro,
Small Enterprises (MSE)
loans upto _____
8 Which of Mudra Loan Tarun Shishu Kishore
Variant is mandatorily to
be sanctioned under
repayment option?

Page 1
VARIOUS SME PRODUCT

Choice 4 (Max. Right Ans Category( Chapter


1000 Characters) (Numeric B-Basic, Number
) M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
Both a & b and 3 M 11
Personal guarantee
of Board of
Directors.

50% of amount in 4 B 11
default subject to
maximum of
Rs.100 lakh

Borrower 4 A 11

30.09.2018 3 B 11

respective LHO on 1 M 11
or before May, 31
of every year till
the end of the
tenure of
guarantee cover
by debit to
borrower’s account
or Branch Charges
A/c, as applicable.

By online 1 B 11

Below Rs 25 lacs 1 G 11

Neither of above 2 G 11

Page 2
VARIOUS SME PRODUCT

9 Stock Statement is 28th Feb 31st December 31st March


required to be obtained
on every _______ of year
other than at the time of
sanction in Pradhan
Mantri Mudra Yojna
10 Which is target group of Women Scheduled Caste (SC) Both A & B
Scheme Stand Up India or Scheduled Tribe (ST)
11 Minimum and Maximum Minimum – More Minimum – More than Minimum – More
Quantum of finance than Rs. 1 lakhs Rs. 5 lakhs and Maximum – Rs. than Rs. 1 lakhs
available under Stand and Maximum – Rs. 50 Lakhs 2 crore and Maximum – Rs. 1 crore
Up India is
12 SBI ASSET BACKED LOAN Current Assets Fixed assets Both A & B
scheme is available only
for finance of
13 Type of loan available Cash Credit Term Loan facility Drop-line Overdraft
under ABL is facility facility
14 Loan to Value ratio (%) 60% 75% 50%
in ABL is
15 Minimum and Maximum Minimum – More Minimum – More than Minimum – More
Quantum of finance than Rs. 10 lakhs Rs. 10 lakhs and Maximum – than Rs 5 lakhs
available under ABL is and Maximum – Rs. 20 crores Rs. 10 crores and Maximum – Rs. 15 crores

16 Which type of Commercial Residential Property Mixed Land use


immovable property not Property property
eligible as security
17 Maximum repayment 10 yrs 15 yrs 08 yrs
available under ABL is
18 If there is any changes Yes, to Yes, to Supply Chain Yes, to SME
in Limit/Drawing Transaction Finance Unit Department at
Power/Limit Expiry date Business Unit LHO
in e-DFS account,
whether the Branch is
required to advise these
changes to any
department of the Bank?
19 M/s. ABC Ltd. has No, M/s. ABC Ltd. Yes, M/s. ABC Ltd. is Yes, M/s. ABC Ltd.
approached us for is not eligible to eligible to avail loan is eligible to avail
sanction of loan under avail loan under under LRDS with loan under LRDS
Lease Rental LRDS Deviation approval
Discounting Scheme from competent
(LRDS) for a commercial authority
building owned by them
and given on lease to
M/s.DEF Pvt. Ltd. an
associate concern of
M/s. ABC Ltd. Whether
M/s. ABC Ltd. is eligible
20 Under SME SMART score 50 Lakhs 10 LAKHS 25 Lakhs
scheme a trader can be
sanction limits up to
maximum Rs --

Page 3
VARIOUS SME PRODUCT

30th September 2 B 11

Tribes 3 B 11

Minimum – More 4 M 11
than Rs. 10 lakhs
and Maximum – Rs. 1 crore

Only A 3 B 11

All of them 3 M 11

65% 3 B 11

Minimum – More 1 M 11
than Rs. 5 lakhs
and Maximum – Rs. 10crores

Industrial Property 4 A 11

06 yrs 2 G 11

Not required 2 A 11

None of the above 1 S 11

5 Lakhs G 11

Page 4
VARIOUS SME PRODUCT

21 In respect of SME Smart The Chief Quantum of Finance for Quantum of


Score , which of the promoter should Manufacturing unit is Finance for Trading
following statement is be 18 to 65 years Rs 5.00 Lacs to Rs unit is Rs 5 Lacs to
not correct? of age 50.00 Lacs . Rs 25 Lacs .
22 What will be the Monthly Annually Operational Quarterly
frequency of submission Operational Data Data cum status of Operational Data
of stock statement in cum status of working capital funds cum status of
ABL working capital statement working capital
funds statement funds statement
23 Which option in ABL to Wake up option Run option Exit option
be implemented when
ABL account is under
24 ABL CRE CP is for Residential Commercial Real Estate Institutional
Projects Projects
25 How many days are 45 days 60 days 30 days
available under
Perfection of security in
26 Maximum Loan financed 25 Crores 10 Crores 50 Crores
under ABL CRE CP
scheme is
27 Assessment of Working Assessed Bank Cash Flow of the Turnover method
Capital limits under ABL Finance project
CRE CP scheme will be
done as per
28 Loan to Value ratio (%) 60% 75% 50%
in ABL –RH scheme is
29 Under ABL –RH, which Open Land SEZ Property Industrial Property
immovable property is outside urban
not eligible as security limits
30 What percentage of 100% 90% 75%
invoices are financed
under e-DFS ?
31 In how many categories 4 3 5
the Industry Majors have
been classified for
Interest rate application
32 Which department at PFSBU SMEBU SCFU
Corporate Centre is
owner of e_DFS ?
33 Maximum Loan amount Below 25 Lakhs Below 50 Lakhs Below 100 Lakhs
financed under SSBL is
34 Statements not required.
ii) Credit
limits is assessed as 10
times of average
monthly balance in
current account in last
12 months subject to
minimum above Rs 10 Only( i)
lakhs and less than Rs statement is Only( ii) statement is Both statements
25 lakhs correct correct are correct

Page 5
VARIOUS SME PRODUCT

Margin required is 4 G 11
20% for WC and
33% for TL
Component.
Halfyearly 3 M 11
Operational Data
cum status of
working capital
funds statement
Entry option 3 A 11

None of the above 2 G 11

15 days 3 M 11

100 Crores 3 B 11

Traditional Method 2 M 11

65% 1 M 11

All of the above 4 M 11

50% 1 B 11

2 1 B 11

GMU 3 A 11

Below 10 Lakhs 1 G 11

3 M 11

None of the
statement is
correct

Page 6
VARIOUS SME PRODUCT

35

Under Simplified Cash


Credit Facility (SCCF) Projected
assessment of working Balance Sheet Cash Budget
capital is done as per Method Turnover Method Method
36 Target group under
Simplified Cash Credit
Facility (SCCF) is All Segment Manufacturing activity Services Activity
37 Maximum Rs 10 Maximum Rs 20
Maximum and minimum crores and crores and
limit available under minimum Maximum Rs 15 crores minimum amount
Simplified Cash Credit amount is Above and minimum amount is Above Rs 2
Facility (SCCF) Rs 1 crores is Above Rs 5 crores crores
38 Under Simplified Cash
Credit Facility (SCCF) :
1) FBWC limits will be
assessed on the basis of
actual peak inventory
plus receivables levels
for the previous 12
months.
2) It should not be taken
individually, i.e. peak
stock level in one month
and peak receivables
level in another month;
peak level on the basis
of aggregate of Only Statement Only Statement (ii) is Both Statements
inventory and holding (i) is correct correct are correct
39 Under Medical
Equipment Finance
Scheme
1) Professional
Qualification of applicant
is not mandatory.
2) Applicant should have
minimum 3 years of
operations of the
diagnostic center,
pathological lab, Only Statement Only Statement (ii) is Both Statements
hospital, nursing home, (i) is correct correct are correct
40 Corporate Loan cant not Research and
be sanctioned for the Shoring up of Repayment of high cost Development
purpose NWC debt expenditure
41 Maximum quantum of
Loan for non corporates
under Corporate Loan is Rs 10 crores Rs 5 crores Rs 20 crores
42 Corporate Loan can be Not more than 5 Not more than 2 Not more than 1
sanctioned to a
company?

Page 7
VARIOUS SME PRODUCT

On the basis of 4 A 11
actual peak
inventory plus
receivables levels
for the previous 12
months.
2 M 11

Traders
Maximum Rs 20 4 A 11
crores and
minimum amount
is Above Rs 5
crores
3 A 11

None of the
Statements is
correct
3 A 11

None of the
Statements is
correct
4 A 11
For Takeover of
restructuring loan
1 M 11

Rs 15 crores
Not more than 3 4 M 11

Page 8
VARIOUS SME PRODUCT

43 Term Loan facility with


option of pre approved
and multiple General Purpose
disbursement purpose is Corporate Loan SME Open Term Loan Term Loan
44 Loan i)
Non – customers shall
not be eligible. ii)
Units under
Manufacturing and
Service sector are Only Statement Only Statement (ii) is Both Statements
eligible. (i) is correct correct are correct
45 20% of the total 30% of the total limit 40% of the total
Under SME Open Term limit sanctioned sanctioned with a limit sanctioned
Loan quantum of finance with a maximum maximum of Rs 15 with a maximum of
is of Rs 5 crores crores Rs 10 crores
46 Currency of sanction of
SME Open Term Loan is 06 Months 12 Months 03 Months
47 working capital
facilities (Fund 25% of the working 5% of the working
Based + Non capital facilities (Fund capital facilities
Under Stand By Line of Fund Based) Based + Non Fund (Fund Based + Non
Credit (SLC) what will be Maximum Rs.20 Based) Maximum Rs.10 Fund Based)
the quantum of finance cr. cr. Maximum Rs.05 cr.
48 period of 3 For a maximum
months period of 6 months
extendable up to For a maximum period extendable up to
another 3 of 1 months extendable another 3 months
Period for availing Stand months at any up to another 6 months at any one
By Line of Credit (SLC) is one instance at any one instance instance
49 Under Doctor Plus 10% 25.00% 50.00%
Collateral Security for
Loans up Rs 2 crores is
50 Under SBI Equipment
Loan Scheme:
i) Existing Construction
Equipment Owners &
Contractors Other
Captive Users: Mine
Owner, Port Operator are
eligible. ii)
Facility available is Term
Loan and Drop down Only Statement Only Statement (ii) is Both Statements
Overdraft facility (i) is correct correct are correct
51 Minimum collateral 100% 75.00% 50.00%
security required for
loans up to Rs 10 lacs is
52 Under CGTMSE Annual By Borrower By Bank By Govt
Guarantee Fee (AGF) for
Rs 50 Lakhs Term Loan
will be pay by

Page 9
VARIOUS SME PRODUCT

2 M 11

Composite Term
Loan
3 A 11

None of the
Statements is
correct
50% of the total 1 M 11
limit sanctioned
with a maximum of
Rs 5 crores
2 B 11
09 Months
1 M 11
20% of the working
capital facilities
(Fund Based + Non
Fund Based)
Maximum Rs.25 cr.
For a maximum 1 B 11
period of 02
months extendable
up to another 3
months at any one
instance
Nil as the credit 4 M 11
facility to be
covered under
3 A 11

None of the
Statements is
correct
Nil 4 G 11

By borrower and 1 G 11
Bank jointly

Page 10
VARIOUS SME PRODUCT

53 Under CGTMSE Annual By Borrower By Bank By Govt


Guarantee Fee (AGF) for
Rs 50 Lakhs Cash Credit
will be pay by
54 For Loan sanctioned and 30/06/2018 31/12/2018 30/09/2018
disbursed on
29/05/2018 under
CGTMSE scheme, last
date for payment of
55 Under CGTMSE proposal No. Yes. Yes after taking
can a third party approval
guarantee from brother
of Proprietor be
56 Extent of Guarantee
cover available for loan 60% of amount in 50% of amount in 75% of amount in
for Rs 200 Lakhs under default subject to default subject to default subject to
CGTMSE owned by maximum of maximum of Rs.100 maximum of
Women enterpreneurs is Rs.120 lakh lakh Rs.150 lakh
57 Facility available under Cash Credit Dropdown Overdraft Term Loan
Flexi Loan for Trade & facility facility
Services Sector scheme
58 Quantum of finance 15% of the 25% of the working 15% of the
under Stand By Line of working capital capital facilities (Fund working capital
Credit for Working facilities (Fund Based + Non Fund facilities (Fund
Capital requirement will Based + Non Based) Maximum Rs.10 Based) Maximum
be Fund Based) cr25% of the working Rs.15 cr
Maximum Rs.20 capital facilities (Fund
cr Based + Non Fund
Based) Maximum Rs.10
cr
59 Maximum Amount of Rs 5 Lakhs Rs 2 Lakhs Rs 10 Lakhs
loan can be sanctioned
under ARTISAN CREDIT
CARD is
60 Facility available under Working Capital Term Loan only Term Loan and
Dall Mill Plus scheme are (Fund Based Working Capital
61 What are the different Pull Method Push Method None of the above
methods available for
initiation of transactions
in e-DFS
62 Minimum tangible 100% 75% 60%
Collateral security
required under m-DFS
63 Maximum credit period 30 days 60 days 90 days
available under m_DFS
scheme is
64 Under which scheme E-DFS M-DFS E-VFS
clean Cash Credit facility
is sanctioned?

Page 11
VARIOUS SME PRODUCT

By borrower and 1 M 11
Bank jointly

31/05/2018 3 B 11

None of the above 1 B 11

None of the 2 B 11
Statements is
correct

Non Fund Based 3 B 11

25% of the working 1 A 11


capital facilities
(Fund Based )
Maximum Rs.10 cr

Rs 25 Lakhs 2 M 11

Non Fund Based 3 M 11


only
Both 1 & 2 4 M 11

50% 2 A 11

120 days 3 M 11

ABL 3 A 11

Page 12
VARIOUS SME PRODUCT

65 Quantum of finance Minimum Rs 5 Minimum Rs 5 Lakhs Minimum Rs 5


under FLEXI LOAN Lakhs and and Maximum Rs 100 Lakhs and
SCHEME is : Maximum Rs 100 Lakhs Maximum Rs 200
Lakhs Lakhs
66 Quantum of finance 15% of the FBWC 20% of the FBWC limits 15% of the FBWC
under SME Credit Plus limits with with maximum up to Rs limits with
Scheme is maximum up to 25 lacs maximum up to Rs
Rs 20 lacs 25 lacs
67 Collateral Security not ABL LRD CGTMSE
mandatory for credit
facilities sanctioned
68 Ms Garima, an IIT pass Stands Up India MUDRA PMMY
out wants to start her
green field venture
(Proprietary Concern) of
manufacturing TIN CAN.
Under which scheme she
can applied for finance
for Rs 75 lakhs?
69 A regular raw material ABL E-VFS E-DFS
supplier to TATA Motors
approaches for credit
facilities against TATA
Motors receivables.
Which scheme will be
best suited to the
70 A Small Trader SBBL SCCF MUDRA
proprietary concern is
having current account
with your branch having
average balance of Rs 2
lacs. Under which
scheme the small trader
can be approached for
availing credit facilities
with minimum paper
requirement up to Rs
71 An IIT pass out lady SBBL MUDRA SUI
needed credit facilities
for Rs 1 crore for setting
her own small
manufacturing plant.
Under which scheme she
can apply for availing

Page 13
VARIOUS SME PRODUCT

Minimum Rs 10 1 M 11
Lakhs and
Maximum Rs 500
Lakhs
25% of the FBWC 2 M 11
limits with
maximum up to Rs
20 lacs
ABLCRE CP 3 G 11

None of the above S 11

M-dfs 2 S 11

SUI 1 S 11

PMEGP 3 S 11

Page 14
VARIOUS SME PRODUCT

72 M/s ABC ltd is enjoying SME Open term Corporate Loan Term Loan
credit facilities from our Loan
XYZ branch for last 6
years. Now they want a
pre-approved term loan
for setting up of new
machinery and
construction of factory
shed. Under which
scheme bank can offer
desired facility i.e. pre
approved term loan type
73 M/s XYZ requested for Corporate Loan Term Loan General Purpose
sanction of term loan for TL
acquiring patent. Under
which scheme we can
process the request ?
74 M/s ABC Pvt Ltd has EVFS EDFS Cash Credit Limit
been appointed as
authorised distributor of
Maruti Suzuki cars. Our
Bank's which scheme
will be the best option
for the RMSE to tap this
75 Under SME Credit Card 20% of their 25% of the annual 50% of their Gross
Scheme, Working capital annual turnover turnover Income as per IT
Assessment for Returns
Professional & Self
Employed is made as
76 Current ratio of the M/s Corporate Loan SME Open Term Loan General Purpose
XYZ Pvt Ltd is below 1. TL
The unit is facing
liquidity issues. The unit
approaches for bank's
assistance to improve
liquidity. Which scheme
can be helpful in
improving the current
ratio of the company?
77 The owner of the Lease Rental ABL SSBL
building taken on lease discounting
by Multinational (LRD)
Company approaches for
sanction credit facilities
for liquidity mismatch in
his existing trading
unit ? Which scheme will
be the best option for
him to avail the credit

Page 15
VARIOUS SME PRODUCT

General Purpose TL 1 S 11

SME Open term 4 S 11


loan

SCCF 2 S 11

100% of their 4 B 11
Gross Income as
per IT Returns

Working Capital 1 S 11
Demand Loan

EDFS 1 S 11

Page 16
VARIOUS SME PRODUCT

78 RMSE Rahul Modi LLMS LOS SME LOS Agri


sourced a proposal for
working capital facility
(CC) Rs 75 lacs . It will
be processed in which
79 For all eligible proposal CUE Rating PACE Tool Scoring Model
below Rs 50 Lacs under
Project Vivek ___________
will be used for credit
decisions (Go/No Go
decision)

Page 17
VARIOUS SME PRODUCT

LOS PB 2 S 11

All of the above 1 A 11

Page 18
LEGAL ASPECT OF ADVANCES

S.No. Question Choice1 Choice 2 Choice 3 Choice 4


(Maximum 1000 (Max. 1000 (Max. 1000 (Max. 1000 (Max. 1000
Characters) Characters) Characters) Characters) Characters)

1 During implementation of FSMTL 2, FSMTL 2, FSMTL 1, FSMTL 3,


the project, which of the Quarterly Halfyearly Quarterly Quarterly
following statement is
required and at what
2 After commencement of FSMTL 1 FSMTL 2 FSMTL 3 None of these
commercial production in
case of term loan which of
the following statement is
required to be submitted
3 Nature of charge Pledge Assignment Hypothecation Hypothecation
registered with ROC is and Mortgage of Lien
4 Charges is to filed with RoC 15 days from 30 days from 45 days from 60 days from
within the date of the date of the date of the date of
creation of creation of creation of creation of
Charge Charge Charge Charge
5 Mortgage is defined in The The Transfers of The Banking
Contracts Act Negotiable Property Act Regulations
Instruments Act
6 Stock Statement relied 1 Months 2 Months 3 Months 6 Months
upon by banks for
determining Drawing
Power should not be older
7 Stand alone regular term Annually Half yearly Once in three No review
loan should be reviwed years required
8 In case of project loans, FSMTL 1 FSMTL 2 FSMTL 3 None of these
during implementation of
the project, inspection
report to be compiled on
9 What should be treatment It should be It should not It should not None of these
of sundry creditors while deducted be deducted be deducted
calculating DP from Current from Current from Current
Assets Assets Assets till
there is no
dilution in
NWC or
10 Finished goods should be Cost of Seling price Market Price Lowest of a, b
valued at production or &c
government
11 For creation of equitable Title Deed Record of Title Deeds Nil EC,Legal
mortgage it is essential to and NIL EC rights and NIL and Record of opinion and
have EC Rights Letter of
intension of
Sale

Page 1
LEGAL ASPECT OF ADVANCES

Right Ans Category( Chapter


(Numeric) B-Basic, Number
M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
3 B 12

3 B 12

3 B 12

2 B 12

3 B 12

3 B 12

1 B 12

2 B 12

1 B 12

4 B 12

1 B 12

Page 2
LEGAL ASPECT OF ADVANCES

12 What is true in case of Account Allocated Both are true None is true
allocated limits should be limits should
opened with not be
same CIF overdrawn
13 As per Audited Balance Rs. 100 lac Rs. 90 lac Rs 120 Lacs Cannot be
Sheet as on 31.03.2018, calculated
total Current Assets level from the given
was Rs. 150 lac. Out of information
which, the chargeable
current assets was 80% of
total current assets. As per
terms of sanction, 25%
margin on chargeable
current Assets has been
stipulated for FBWC limit of
Rs. 100 lac. What would be
the drawing power for the
month of April 2018?
14 What is the basic function To ensure the To ensure the To determine To determine
of credit monitoring? borrower borrower is if the credit what actions
continues to operating facilities are should be
be a good within the being used for taken where
credit risk. credit limits. the intended there is a
purpose cause for
15 What information should
be reviewed in the periodic
progress reports on There are Project reports
implementation of a The project Funding is orders for the have been
project to assess likelihood implementati available to project approved by
of meeting the loan on is on cover any outputs once the lender’s
repayment obligations? schedule. cost overruns. completed. engineer
16 Why should you check for Inventory Higher Excess Inventory pile-
any inventory pile-up pile-up offers inventory inventory, up may be
during unit inspection? additional may pose a when indicative of
business logistical disposed off in adverse
opportunity challenge for bulk, would developments
in terms of the unit in lead to such as
the terms of sudden cash obsolescence,
borrower’s handling/stor inflow which reduced
need for age would cause market
more cash acceptability,
financing imbalance order
cancellation,
speculative

Page 3
LEGAL ASPECT OF ADVANCES

3 B 12

2 S 12

3 M 12

3 M 12

4 M 12

Page 4
LEGAL ASPECT OF ADVANCES

17 company is Rs. 40 Lacs Rs 40 lacs Rs 45 Lacs Rs 60 lacs None of the


and stipuated margin on aboce
inventory and receivables
is 25%. As per the latest
stock statement, the
inventory is Rs 25 Lacs
and the receivable level is
Rs. 35 Lacs. What would
be the drawing power?
18 What is the relevance of Stock Based on a Submission of inventory,
stock statement in the statement scrutiny of stock receivables
administration of FBWC contains stock statement is a and creditors
limits information statement statutory under LCs
which is does a bank requirement which are
“good to decide for availing necessary to
have” for the whether to FBWC limits compute the
bank, though renew a drawing power
not “must FBWC limit which
have” regulates the
amount that
can be drawn
from the FBWC
account
19 Which among the following To hold To assess the
is NOT a primary objective discussion activity level at
of unit inspection? with the To solicit more the unit
promoters To verify the business
and other quantity and opportunities
important quality of with the
employees inventory borrower
20 One of the objectives of To ensure To ensure that To ensure that To ensure that
monitoring a term loan that the borrower the borrower the promoters
during the project adequate has adequate mobilises the have brought
implementation stage is raw material working means of in their
is available capital limits financing as contribution
in place per the terms towards
of sanction working capital

Page 5
LEGAL ASPECT OF ADVANCES

1 S 12

4 M 12

3 M 12

4 M 12

Page 6
LEGAL ASPECT OF ADVANCES

21 You come across a news The No No It can have


report that an agitation operations implication implications serious
has started against one of can be since such since water is implications
your borrowers engaged in temporarily agitations are a cheap since agitation
production of aerated affected easily resource and can lead to a
beverages for drawing since the manageable can be ban on
water from a local river. borrower obtained from drawing water
What are the implications would take alternative from the river.
for your bank’s loan to the the legal sources Sourcing water
company? route and get from
a favourable elsewhere
ruling would add
ultimately transportation
costs which
would affect
the viability of
22 You have sanctioned a While there The The overall Difficult to say
term loan to a company for is a availability of requirement anything at
an expansion project. A possibility of funds for of funds from this stage
portion of the project cost shortfall, it is project internal
amounting to Rs 10.00 too early to implementati accruals is Rs
crores is to be met by think of any on does not 14.00 crores
internal accruals during action. The face any for the current
the current year. The actual constraints year. Going by
company has repayment amount of the internal
obligation of Rs 4 crores internal accruals up to
towards existing term accruals the first half of
loans during the year. The would be the year,
internal accruals up to the known only there is a
first half of the year are Rs after the likelihood of
3.00 crores. Which of the year end shortfall and
following statements is the alternative
most appropriate for this means of
situation? financing
23 What is the implication of a transactions
large number of round sum may not be on
transactions by a These are no account of the
borrower? Such different from Such borrower’s
transactions other transactions regular
result from transactions are done for business and
netting off and are just a accounting need to be
the discounts coincidence convenience probed

Page 7
LEGAL ASPECT OF ADVANCES

4 M 12

3 S 12

4 M 12

Page 8
LEGAL ASPECT OF ADVANCES

24 Examine the
matter
Stock Audit report of a closely. Have
Borrowing unit mentions a detailed
that the inventory level discussion
shown in the stock with the
statement has been Wait for the borrower and Do nothing
substantially higher than next stock the auditor. because
the actual level found in statement Analyse the reduction in
the audit. Youn have and ask the borrower’s drawing power
observed that the drawing auditor to explanations Immediately would lead to
power works out to be verify the and assess if reduce the irrgularity in
substantially lower and the position with those are drawing the account
account would be rendered reference to justified. power as which may
irregular. What is the most the new Finally, take indicated in ultimately lead
appropriate action need to stock action as the stock to the account
be taken by you? statement appropriate. audit report becoming NPA
25 Credit administration is a It regulates It ensures It facilitates It improves the
critical activity in a bank’s flow of loan that need- building of a bank’s
lending business because funds to the based credit cordial competitive
borrower in lines are relationship position as
accordance sanctioned to with the compared with
with the the borrower borrower and other banks
terms and creates
conditions of goodwill for
loan sanction the bank
26 Why should the stock It is always It enables the It facilitates It is
statement include age- helpful to get bank to enforcement manadatory as
wise break-up of as much identify the of the bank’s per RBI
receivables? information receivables security in guidelines
as possible within and recovery
so as to be outside the proceedings in
ready to sanctioned the event of
meet any cover period. default
future Further, it
requirement gives a sense
of such about the
information pace of
realisation of
receivables
27 One of the key aspects of Estimating Checking if Keeping tab Checking if the
monitoring of a term loan the cost of there are on the salaries borrower is
post commencement of production delays in of key defaulting on
commercial production is submission of executives loan
stock repayments to
statements other lenders

Page 9
LEGAL ASPECT OF ADVANCES

2 A 12

1 M 12

2 M 12

4 M 12

Page 10
LEGAL ASPECT OF ADVANCES

28 Which one of the objective Ensuring that


given under is not the part the borrowing
of the Followup Function To relate the entity does
outstanding not have un-
to the assets authorized To ensure that
. To ensure level on a current effective follow
the end use continuous account with up of advances
of Funds basis other banks. is in place
29 In case of Consortium There must Each Memebr FFR should be All the
Banking Arrangements, which be regular Bank should compulorily Activities are
activity is compulsory for ensuring exchange of make a obtained in compulsory.
effective Follow Up information monthly visit the presrcibed
by and to the unit for Format of our
between the Inspection Bank . There
banks is not
involved. deviation
30 If irregularity in an account We should Transactions The credit None of the
persists for longer period, or Callup the in the facilities may above
occurs repeatedly, then what is account. accounts need to be re-
the appropriate course of action should be assessed and
for logical resolution the issues
stopped.
appropriately
addressed.
31 Which of the following contact with All of the
activities is not the part of the borrower above are the
Follow up Supervision and and co- activities
Monitoring noted lenders and involved in
      keeping Follow up,
  Processing abreast of Supervision
Documentati requests for developments and Monitorin
on and irregular in the
maintaining drawings and borrower
its validity reporting entities and
and upkeep these to the business
in custody. controllers. environment.
32 What is the important of assets to assets to be Verification of Verification of
guidelines in respect of be conducted conducted assets to be assets to be
Term Loan within 15 within 30 conducted conducted
indebtedness of Rs.5.00 days of days of within 45 days within 60 days
Cr and above creation of creation of of creation of of creation of
assets. assets. assets. assets.
33 Which of the following      Know the     Hold Ensure that Ensure that
statement is incorrect in tempo of discussion the security account is not
respect to the Physical Activity with the coverage is irregular
Inspection of the Unit. borrower. not diluted at
Periodic Inspection and any time for
Follow up would afford an any reason.
opportunity to not merely
assess the quantity,
quality and value of stocks,

Page 11
LEGAL ASPECT OF ADVANCES

4 M 12

1 M 12

3 M 12

4 M 12

1 M 12

4 M 12

Page 12
LEGAL ASPECT OF ADVANCES

34 option/s. The rigor of any one of both the


Inspection and follow up the general the options options
may be varied depending health of the the conduct
on unit of advances.
35 A unit is enjoying a CC a list of the a copy of the a copy of the All of the
Limit of Rs 25 Crores. fixed assets latest latest half- above
Inspecting officials may charged to monthly stock yearly
carry with them the Bank statement operating
statement
(FFR-II) as per
Annexure-FFR-
II received
from the
borrowing
36 the Field Officer that Inspection of Inspection of Since As per the
Stocks of a particular unit all the the all the Inspection is guidelines
having CRA pof SB-8 , godowns Gododwns not possible, Stock Audit
enjoying limit of Rs 5 should be should be waiver should should be
Crores are stored in conducted completed in be obtained carried out
multiple Godowns located simultaneous phase wise from the annually of
in different places, Then ly or on the during the Sanctioning such unit.
what should be the course same day. period of a Authority
of action. month.
37 made in the Drawing Borrower All of the
inspection Power should should be above
register in not be served
order to approved Notices calling
During the visit to a unit ensure that against the up of the
for Inspection purpose , the contents Stock advances.
whenever a godown of the Statement of
cannot for any reason be godown are that month.
inspected, then what is the examined at
course of action as per the the next
instruction inspection.
38 After Either of the both the above
In case of term loans, commenceme stages. mentioned
Inspection process can be During nt of stages.
divided into follwing implementati commercial
categories on stage production
39 In order to ensure a FSMTL-I & II (i) and (ii) only
meaningful follow up and
supervision ofa unit having
FBWC Limit of Rs 10.00
Crores of the bank,
branches should obtain on Stock
an ongoing basis statements FFR-I & FFR-II

Page 13
LEGAL ASPECT OF ADVANCES

4 M 12

4 M 12

1 M 12

1 M 12

4 M 12

4 B 12

Page 14
LEGAL ASPECT OF ADVANCES

40 For an Inspecting officials, The assess the All of the


visiting the unit for Inspecting level of above
carrying out the official must activity from
Inspection, Which of the check the various
following guidelines he correctness   Inspecting sources, such
has to keep in the mind. of the officials must as the order
production check if the book,
and sales books of Electricity Bill,
information accounts e.g., the work on
supplied to cash book. the shop floor,
him Sales, number of
purchase and shifts of
stock working,
registers are accumulation
being of finished
maintained products and
properly and the general
kept up to tempo activity
date. of the plant.
41 Inspection Report is FSM-3 FSM-4 FSM-5 FSM-6
compiled in the Format
42 Stock statement is FSM-3 FSM-4 FSM-5 FSM-6
obtained in which of the
43 FFR-I is to be submitted by Unit enjoying Unit enjoying Unit enjoying Unit enjoying
which of the unit Working Working Limit Working Limit Working Limit
Limit of Rs 5 above Rs 5 of Rs 10 above Rs 10
Crores and Crores Crores and Crores
44 Periodicity of submission of Quarterly , Quarterly , Quarterly , Quarterly ,
FFR-I is within 45 within 52 within 60 days within 90 days
days from days from the from the end of from the
the end of end of the of the end of the
the reporting reporting reporting reporting
Quarter Quarter Quarter Quarter
45 Timeline for submission of within 60 within 67 within 72 days within 90 days
FFR-II is days from days from the from the from the
the halfyear halfyear end halfyear end halfyear end
46 not commensurate with inefficient Both are true Any of the two
the production management speculative
requirements of the unit of inventory intent of the
could mean borrower.
47 for financial follow up; to
keep a track on the sales,
progress of the unit profitability liquidity diversion of All of the
regarding Performance position funds above

Page 15
LEGAL ASPECT OF ADVANCES

4 M 12

4 B 12

1 B 12

3 B 12

2 B 12

2 B 12

4 M 12

4 M 12

Page 16
LEGAL ASPECT OF ADVANCES

48 a statement All of the


of book debts above are
with age- correct.
wise break- Such book Drawing power
up should be debts should should be allowed
only on such
Which of the statement/s obtained be based on book-debts as are
is correct . Where cash along with invoices and within the norms
credit limits are granted the stock delivery accepted at the
against book debts statement challans time of sanction.
49 Which is the Key authority GM of the DGM of the AGM of the CM ( Credit &
who will have responsibility Concerned Module RBO NPAS) of the
for monitoring the overall Network region
credit portfolio.
50 To Ensure End Use of Funds End Use Stock Direct All of the
, what are the important Certificate Statement Disbursement above
activities need to be should be should be to the supplier
performed obtained obtained, and
from the scrunitised Transactions
borrower and analysed in the account
should be
monitored
51 What comes under the To ensure To ensure that     To monitor All of the
Monitoring Function that Effective appropriate on an ongoing above
activities supervision responses are basis the
is maintained initiated asset
on wherever portfolios by
loans/advanc early warning tracking
es signals exists changes from
52 Supervision Function refers early warning All of the
to signals, above
identify
incipient
To ensure sickness and,
that effective To ensure that to iniatiate
follow up of asset quality proactive
advances is of good order remedial
in place is maintained measures

Page 17
LEGAL ASPECT OF ADVANCES

4 M 12

1 B 12

4 M 12

4 M 12

4 M 12

Page 18
LEGAL ASPECT OF ADVANCES

53 Which of the following       Each and Before Follow up for All are correct
statement is incorrect in every disbursement timely
respect to the Follow up sanction of loans/ submission of
aspects of Credit should be credit Statements of
Administration reported for facilities, a Stocks and
control certificate Book Debts,
purpose to regarding and their
the next compliance careful
higher with terms scrutiny, for
authority. and correct
conditions of computation
the sanction of Drawing
should be Power
placed before
the branch
head, as per
laid down
54 Which of the statement/s Stock      The   While All the three
is/are correct in respect to Statements position of allowing statements are
the Stock Statement received movement of drawings in correct
from the stocks with accounts on
Borrower the the basis of
need to be information stock
analyzed and about the statements, it
scrutinized level opening should be
properly. The of stock, level ensured that
information of stock in stocks
submitted and stock out purchased
should be with the under Usance
complete in closing stock LCs are
all respects will have to invariably
analyze to mentioned
arrive to the separately
facts that and no DP is
there are no allocated
slow moving against such
or obsolete stocks. This is
stocks necessary to
against which avert any
allowing possibility of
55 Term Loans, which are once in three once in six once in nine once in twelve
irregular, are required to months months months months
be reviewed
56 Format FSM-7 is known as Format of Format of
Stock Follow up Format of
Statement Register for Inspection
monitoring Register
timely receipt ( Inspection at
of FFRs a glance Inspection
/statements Register ) Report Format

Page 19
LEGAL ASPECT OF ADVANCES

4 M 12

4 M 12

2 B 12

3 G 12

Page 20
LEGAL ASPECT OF ADVANCES

57 What does FSM Stand for Followup Followup, Followup, Followup,


Supervision Survilience Supervsion Supervision
and and and Marketing and Monitoring
Maintenance monitoring
58 of age trend in the build up of All of the
The Book Debts has also to profile average bad Debts. above are
be analyzed from the angle collection important
of period,
59 In the Stock Statement, Closing stock All of the
Wcich of the following/s of last month above
are the major areas to be and opening • Stocks are
looked into stock of this related to Unit cost of
month are business activity major items to
similar. only. be verified.
60 FIFO Method LIFO Method followed in Average of
A. Method of valuation of preparation of FIFO and LIFO
current assets in the stock the annual Method
statement should be consistent financial
with the norms statements.

Page 21
LEGAL ASPECT OF ADVANCES

4 G 12

4 B 12

4 B 12

3 M 12

Page 22
POST SANCTION PROCESS

S.No. Question Choice1 Choice 2 Choice 3 (Max.


(Maximum 1000 Characters) (Max. 1000 (Max. 1000 1000
Characters) Characters) Characters)

1 In ordinary course of banking, normal special term loan


irregularity can be allowed only circumstances circumstances accounts
in _____________________.
2 SMA 0 are those accounts where 1 to 30 31 to 60 61 to 90
principal or interest payment is
overdue between ____________
days.
3 SMA 1 are those accounts where 1 to 30 31 to 60 61 to 90
principal or interest payment is
overdue between ____________
days.
4 Branches should invariably 5th 20th 30th
report irregularities in Borrowal
accounts to the appropriate
authorities before _______ day of
5 Whether irregularity in working Yes No Can't Say
capital accounts arised due to
interest application and
regularised within 30 days are
required to be reported?
6 Special Mention Accounts are Doubtful, Substandard, Standard, Sub-
new asset category between Substandard Doubtful standard
_________ and _________ assets.
7 A term loan will be classified as 30 days More than 90 89 days
NPA if installment or interest days
remains overdue for a period of
__________ days.
8 The objectives of SMA Early Drawing up Implementation
identification and reporting are identification of action plan of approved
potential NPAs action plan
9 The objectives of irregularity To keep the To seek To put forth/
reporting are concerned confirmation of evolve plan of
authority irregularity action for
informed of the from regularizing
position of appropriate irregularity in the
irregular accounts authority account
10 Which types of borrowers are Borrowers NPA Borrowers Defaulters
not eligible to be considered for indulged in frauds
restructuring and malfeasance
11 What is the periodicity for First reporting by On quarterly Both 1 & 2
reporting of irregularity in NPA 10th of basis as per
accounts? subsequent calendar
month after NPA quarter viz.Jan-
classification March, Apr-

Page 1
POST SANCTION PROCESS

Choice 4 (Max. Right Ans Category( Chapter


1000 (Numeric B-Basic, Number
Characters) ) M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
None of the 2 B 13
above

None of the 1 B 13
above

None of the 2 B 13
above

10th 4 M 13

None of the 1 M 13
above

None of the 3 M 13
above

None of the 2 M 13
above

All the above 4 A 13

All the above 4 A 13

None of the 1 A 13
above

None of the 3 A 13
above

Page 2
POST SANCTION PROCESS

12 How the income from NPA is It is recognised on It is not Interest on


recognised accrual basis recognised on advances
accrual basis against Term
and is booked Deposits, NSCs,
only when IVPs, KVPs and
actually Life Insurance
received policies may not
be taken to
income account
on the due date
if not yet
13 Appropriation of recoveries of A,B,C B,A,C C,B,A
following in NPAs as per the
Bank’s extant instructions is
done in accordance with which
priority. (A) Charges
(B) Unrealised Interest/Interest
(C) Principal

14 The asset should be If the realizable If the realizable If the realizable


straightaway classified as value of security value of value of security
doubtful asset: is less than 50% security is less is more than
of the value than 10% of 50% of the value
assessed by the the value assessed by the
Bank or accepted assessed by Bank or
by RBI at the time the Bank or accepted by RBI
of last inspection accepted by at the time of
RBI at the time last inspection
15 The asset should be If realizable value If realizable If realizable
straightaway classified as Loss of the security as value of the value of the
asset: assessed by the security as security as
Bank/ approved assessed by assessed by the
valuers/ RBI, is the Bank/ Bank/ approved
less than 10% of approved valuers/ RBI, is
the outstanding in valuers/ RBI, is less than 50% of
the accounts less than 5% of the outstanding
the outstanding in the accounts
16 A cash credit account turned Yes for January No irregularity Yes for
irregular on 31.12.2017 due to 2018 reporting is December 2017
application of interest. The required. and January
borrower regularised the 2018
account on 15.01.2018. Whether
irregularity report is required to
17 A term loan account turned Yes for January No irregularity Yes for
irregular on 31.12.2017 due to 2018 reporting is December 2017
application of interest. The required. and January
borrower regularised the 2018
account on 15.01.2018. Whether
irregularity report is required to

Page 3
POST SANCTION PROCESS

Both 2 and 3 4 A 13

C,A,B 1 A 13

If the realizable 1 A 13
value of security
is more than 10%
of the value
assessed by the
Bank or accepted
by RBI at the
time of last
inspection
If realizable value 1 A 13
of the security as
assessed by the
Bank/ approved
valuers/ RBI, is
not less than
2.5% of the
outstanding in
the accounts
None of the 2 S 13
above

None of the 3 S 13
above

Page 4
POST SANCTION PROCESS

18 In a term loan account, SMA 0 SMA 1 SMA 2


installment payment due date
has been fixed as 15th of the
month. The term loan
installment since March 2018 is
overdue. The account will be
classified under which SMA
category as at the end of April
19 A cash credit account is irregular SMA 0 SMA 1 Not to be
since 15.04.2018. Under which categorised as
SMA category it is required to be SMA as default is
classified as on 30.04.2018 ? for less than 30
days in cash
credit account.
20 In a term loan account, 09.06.2018 30.06.2018 10.05.2018
installment payment due date
has been fixed as 10th of the
month. The term loan
installment since March 2018 is
overdue. If borrower fails to pay
the overdue amount, the
account will be classified as NPA
21 A cash credit account turned No. Irregularity Yes. On Yes. First
NPA on 15.05.2018 with reporting is not monthly reporting by
outstanding balance of Rs.1.50 required to be intervals. 10th of
crore. Whether irregularity done in NPA subsequent
reporting is required to be done accounts. month and
after classification as NPA? If thereafter on
yes, what will be periodicity of quarterly basis
the reporting? at the end of
22 An account turned NPA as on Sub-Standard NPA Doubtful upto 1
31.12.2013. The present year
outstanding in the account as on
31.03.2018 is Rs.75 lacs. The
available security value as on
31.03.2018 is Rs.50 lacs. Under
what category the account will
be classified as on 31.03.2018
as per IRAC norms?
23 An account turned NPA as on 25 39 60
31.03.2015. The present
outstanding in the account as on
31.03.2018 is Rs.60 lacs. The
available security value as on
31.03.2018 is Rs.35 lacs. What
will be the provision amount as
on 31.03.2018 as per IRAC
24 As per RBI's IRAC norms, assets Performing and Performing and Irregular and
has been classified as Non-performing Irregular Non performing
___________ and ____________
assets

Page 5
POST SANCTION PROCESS

None of the 1 S 13
above

SMA 2 3 S 13

31.03.2018 1 S 13

None of the 3 S 13
above

Doubtful more 4 S 13
than 3 years

6 2 S 13

Irregular and SMA 1 G 13

Page 6
POST SANCTION PROCESS

25 As per RBI's IRAC norms, NPA SMA, Standard Standard Substandard


has been classified under which Assets and Assets and Assets, Doubtful
categories? Substandard Substandard Assets and Loss
Assets Assets Assets
26 If a term loan account is SMA 0 SMA 1 SMA 2
irregular since 15.02.2018,
under which SMA category it will
be classified as on 31.03.2018?

Page 7
POST SANCTION PROCESS

SMA and 3 G 13
Standard Assets

None of the 2 G 13
above

Page 8
OVERVIEW OF INTERNATIONAL BANKI

S.No. Question Choice1 Choice 2 (Max. Choice 3 (Max.


(Maximum 1000 (Max. 1000 1000 Characters) 1000 Characters)
Characters) Characters)

1 Whether limits for Yes No Cannot Say,


discounting of usance bills depend upon case
drawn underLCs (foreign or to case basis.
domestic) opened by first
class banks is a part of
2 The LC backed sales is Rs 5 Crores Rs 10 Crores Rs 15 Crores
expected to be 50% out of
the Estimated Gross Sales of
Rs 120.00 Lacs by the unit
for the coming year. Given
the average usance period of
LC is 3 months, what will be
the Bill Discounting Limit
that can be assessed to the
3 Which of the following does Total Purchase Average Usance Lead Time
not affect the quantum of of Stocks Period
working capital LC limit
4 An LC limit is estimated at Rs It is estimated It is estimated to It is estimated to
4 Crs,considering average to go up from go up from Rs 4 go up from Rs 4
usance period of 30 days Rs 4 Crs to Rs. Crs to Rs. 6Crs Crs to Rs. 8Crs
and lead time of 30 5Crs
days.However borrower
argued that based on his
fresh negotiations with his
supplier the average usance
time is likely to be 60 days in
place of earlier 30 days
,what will be the impact on
5 Presently packing Credit in US dollar Pound Sterling Japanese Yen
foreign Currency(PCFC) is not
available in which of the
following currencies
6 A customer has received US Dollar Pound Sterling Euro
export orders worth 10
million US Dollar. It is
authorized to get PCFC in
which of the following
7 From risk prespective,which LC Bill Advances against Advances against
of the following type of post Negotiation bills sent on Duty Drawback
shipment finance is facility collection basis. entitlements
considered as more risk

Page 1
OVERVIEW OF INTERNATIONAL BANKI

Choice 4 (Max. Right Ans Category( Chapter


1000 Characters) (Numeric B-Basic, Number
) M-Medium, (Numeric
A-Advance, )
S-Situational,
G-Grace)
None of the above 2 M 14

Rs 25 Crores 3 S 14

All of the above 4 M 14


affect quantum of
working capital LC
There will not be 2 S 14
any change on
quantum of limit.

Australian Dollar 3 B 14

It is eligible to get 4 B 14
PCFC in any of the
above mentioned
currencies

Advances against 4 B 14
exports on
consignment basis.

Page 2
OVERVIEW OF INTERNATIONAL BANKI

8 If the proceeds of export bills Normal rate as Rate applicable on Rate applicable as
are not realised within the applicable to post shipment on Cash Credit
normal transit period in the post shipment finance +2% Limit rate
case of demand bills and finance applicable for the
within due date in the case unit
of usance bills, interest
chargeable for the overdue
9 If export do not materialize Only the Disbursed amount Disbursed amount
at all ,after the disbursement disbursed from EPC account from EPC account
of Export Packing Credit, amount in EPC should be should be
which of the following course account will be recovered and recovered and
of action is correct recovered. rate applicable on rate applicable on
CC advance should CC advance should
be charged from be charged from
date of recovery date of
disbursement

10 Packing credit is an advance pre-shipment a priority sector


made for finance for export. advance.
packing goods
11 Which of the following merchant a person making sub-suppliers to
person is not eligible for packing exporter. deemed exports. manufacture
credit? exporter.
12 The running account facility status holders export for exporters with
for packing credit is available only. specified goods. good track record
13 for
Normally the maximum 90 days. 135 days. 180 days.
period for which packing
credit advances are made is
14 A pre-shipment advance is proceeds of export incentives. post-shipment finance.
not expected to be adjusted export bill
15 by
Pre-shipment credit in maximum 180 minimum 180 maximum 270
foreign currency is available days. days. days.
for a period of
16 The following is not a post- negotiation of purchase of foreign advance against
shipment advance bill under letter bill. foreign bill for
of credit collection
17 A bill drawn under a letter of the bank should take the bill on must negotiate
credit contains discrepancies refuse to collection basis irrespective of
negotiate only. discrepancies
documents
18 Which is correct statement It is Importer   IEC code is not    PAN Number is
about IEC code? Exporter code, mandatory to do not mandatory for
the Import Export getting IEC code
business in India
19 Who issues IEC code? RBI RBI with the DGFT
consultation of
Central
20 Who determines ‘who’ can   Reserve Bank   Ministry of        RBI in
do the export-import from of India Commerce consultation of
India and ‘what’ commodity Ministry of
can be imported/exported Commerce
in/from India?

Page 3
OVERVIEW OF INTERNATIONAL BANKI

None of the above 2 B 14

Disbursed amount 4 M 14
from EPC account
should be
recovered and
rate applicable on
CC advance
+penal interest not
exceeding 2 %
should be charged
from date of
advance for 2 B 14
importer.

supplier to sub- 4 B 14
supplier to manufacture
exporter
exporters with 3 B 14
orders above Rs.
100
360crores.
days. 3 B 14

local funds. 4 B 14

maximum 360 1 B 14
days.

packing credit 4 B 14

may purchase it or 4 M 14
take it for
collection, but
should not refuse
Different branch of 1 G 14
a company will
have different IEC
code
DGFT with 3 G 14
consultation of RBI

   DGFT 4 G 14

Page 4
OVERVIEW OF INTERNATIONAL BANKI

21 Letter of Credit transactions UCPDC500 UCPDC600 issued    URC522 issued


are governed by which issued by ICC by ICC Paris by ICC Paris
guidelines? Paris
22 Which statement is true   It is a    It is a settlement   It is a settlement
about consignment export? settlement mechanism for mechanism for
mechanism for settling export settling export
settling export when exporter will when exporter will
when exporter receive the money receive the money
will receive the when the importer when importer
money on due was able to sell the receive the bill and
date of the bill goods and is least pay at sight
risky for exporter
23 An exporter has submitted Since the bill is The bill is backed The bill is backed
you an export bill of backed by LC by LC issued by by LC issued by
USD10,000.00 under an LC issued by our our correspondent our correspondent
issued by our correspondent correspondent bank we may bank we may
bank. LC requires for bank we may purchase the bill purchase the bill
submission of draft, invoice, purchase the since all the since all the
BL, Packing list, insurance bill since LC documents are documents are
and certificate of origin. itself is a presented by the presented by the
Exporter has submitted the specified exporter and exporter and for
bill with all the required security and all shipping bill is not non submission of
document of LC but it was the documents a required shipping bill
not having shipping bills are presented document under suitable note can
issued by customs. Which is by the exporter LC and will remain be put since it is
correct response? with the branch not a required
document under
LC and will remain
24 A status holder exporter is Within 12 Within 18months   Within 06month
obliged to realize the export months of the of export of export
bill within what period? export
25 What are the obligations   Exporter has Exporter has to do Exporter has to do
attached when an exporter to do the export the export within the export within
received advance payment within 2years of 1year of advance 6months of
for export? advance payment receipt advance payment
payment failing which it will receipt failing
receipt failing be reported to RBI which it will be
which it will be in quarterly reported to RBI in
reported to RBI statement/EDPMS quarterly
26 An importer wants to send Presence of a Presence of a Bank   Presence of a
advance remittance for Bank guarantee guarantee from Bank guarantee
import of machinery from from International Bank from International
USA. Which rule will be International if the value of Bank if the value of
applicable while sending Bank if the import is import is
advance remittance for value of import exceeding exceeding
import? is exceeding $200,000.00, $500,000.00,
$100,000.00,
27 Availing post-shipment credit exporters who all exporters who exporters who
in foreign currency is have not availed have availed have availed pre-
compulsory for packing credit. packing credit. shipment credit in
foreign currency.

Page 5
OVERVIEW OF INTERNATIONAL BANKI

URR725 issued by 2 G 14
ICC Paris

  It is a settlement 4 B 14
mechanism for
settling export
when exporter will
receive the money
when the importer
was able to sell the
goods and is most
risky for exporter
The bill is backed 4 S 14
by LC issued by
our correspondent
bank we may
purchase the bill if
all the documents
of LC along with
shipping bill is
submitted by the
exporter and
documents are
complying
presentation

Within 09 months 4 B 14
of export.

There is no 2 M 14
obligation attach
as far as export is
concerned.

   Presence of a 2 M 14
Bank guarantee
from International
Bank if the value of
import is
exceeding
$1Million.

exporters who 3 M 14
have availed credit
from banks.

Page 6
OVERVIEW OF INTERNATIONAL BANKI

28 Advance remittance from the advance shipment will be advance does not
importer can be accepted by does not carry made only after exceed 25% of export
an exporter in India provided interest one year from the value.
payment. date of receipt of
29 A bank may refuse to accept when the advance
when . the when the
an export bill for collection customer has documents have documents are
sufficient limits discrepancies received from a
under bill when compared to non customer
discounting letter of credit
facility. requirements.
30 Extension period of credit 180 days 90 days 220 days
for export
31 The standard policy of ECGC buyers failure insolvency of the cancellation of the
covers the risk of to obtain collecting bank import licence in
import license the buyers country.
32 Submission to the bank of USD 10,000. USD 25,000. USD 1,00,000.
the bill of entry as evidence
of import is mandatory
where the value of import
33 The currency in which The country from The country of The arrangement
payment for import is made which the goods origin of goods. between the buyer
depends upon are shipped and seller.

34 Pre-Shipment Credit or   a,c and d a,b and d only a to c only


packing credit allowed for (a)
Purchase of raw materials (b)
processing of goods (c)
packing of goods prior to
shipment, (d) working
Capital expense towards
rendering of Export Services.
Please choose the Correct
35 Pr eshipment or packing Letter of Credit Letter of credit A Confirmed or
credit can be given on the opened in Opened in favour irrevocable order
basis of which of the favour of the of another person. for export of goods
36 A Cash Credit type running   Good Track Sub Suppliers of Export Oriented
account facility cannot be Record exporter exporters Units
allowed to which of the
following type of exporters

37 The maximum period    12 months 9 months   15 months


allowed to Exporter in
Special Economic Zones to
realize the export bill

Page 7
OVERVIEW OF INTERNATIONAL BANKI

rate of interest,if 4 M 14
payable, does not
exceed Libor plus
1%.
when the 3 M 14
documents are
received from a
customer.

270 days 2 B 14

all the above. 3 B 14

USD 1,00,000 in a 3 M 14
year

The bank which 1 B 14


the importer's bank
has correspondent
relationship.
All of the above a 4 M 14
to d.

Any of the above 4 B 14

Units in free trade 2 B 14


zones/export
processing
zones/special
economic zone
There is no limit 2 B 14

Page 8
OVERVIEW OF INTERNATIONAL BANKI

38 The Pre-shipment credit is all of the . a and b only a,b and d only
liquated out of (a) proceeds above, a to d
of bills drawn for the export
of same consignment or
some other consignment,
(b) Converting Pre-shipment
credit to Post Shipment
credit,
(c) Balances in EEFC
account,
(d) rupee resources of
exporter representing the
39 If Export does not take place 360 days, date 270 days, date of 270 days, date
for a period of ----- days. of advance advance after 180 days
Such packing credit shall
cease to qualify for rate of
interest on export credit from
40 Pre-shipment credit in   LIBOR   EURO LIBOR EURIBOR
Foreign currency is allowed
at ----- related interest rates:
41 Pre-Shipment credit in a, b and d only a, b and c only A, c and d only
Foreign currency can be
allowed in (a) US Dollar, (b)
Euro, (c) Pound, (d) Yen, (e)
One of the convertible
42 Advance remittance for USD 100000   USD 200000 USD 500000
import of services, without a
Bank Guarantee, that an AD
can allow, can be up to
43 Advance remittance for USD 100000 USD 200000 USD 500000
import of Goods, without a
Bank Guarantee, that an AD
can allow, can be up to
44 External Commercial 3 years 5 years 7 Years
Borrowings are commercial
loans availed from Non
Resident lenders with
minimum average maturity
45 Who requests for opening of Buyer Importer Supplier
Letter of credit in Foreign
Currency
46 An importer wish to avail LC The Limit A proper analysis   LC limits should
Limit for procurement of should be of cash Flow be commensurate
imported raw materials. adequate to pattern of the with borrower’s
While appraising the Limit , facilitate customer should (applicant)
which of the following points procurement of be made to ensure turnover and
should a Credit officer adequate that sufficient working capital
consider for processing quantity of funds are available limits.
Import LC Limit : materials to to meet the
support liability when
uninterrupted payment under the
operation of the LC becomes due.

Page 9
OVERVIEW OF INTERNATIONAL BANKI

a, b and c only. 1 M 14

180 days, date 1 B 14


after 180 days.

Any of the above 4 B 14

All of the above , a 4 B 14


to e

  USD 5000000 3 B 14

  USD 5000000 2 B 14

10 years 1 M 14

  Exporter 2 G 14

All of the above 4 A 14

Page 10
OVERVIEW OF INTERNATIONAL BANKI

47 Why does an Importer prefer   LC facilitates    LC reduces LC facilitate faster


Foreign Currency LC for International Working capital payment
importing the Raw Materials. Trade requirement
Please select the most
appropriate options.
48 The usance period of LCs This ensures A longer usance LC is essentially a
should be in line with the that no period would mean working capital
overall working capital cycle devolvement additional credit facility
of the customer because takes place period which
implies availability
of more funds than
needed to run the
working capital
cycle. This could
lead to diversion of
funds

49 Which of the following is/are Usance and Usance period Physical Inspection
correct in respect of Sight LCs Limits should not exceed of the unit/activity
Appraisal and Assessment of should be the production is mandatory in
Import LC assessed cycle excepting in respect of Foreign
separately the case of bulk LCs etc
50 Which of the following Meaningful Cash budget It is also to be
Statement is incorrect in analysis of cash should be ensured that the
respect to the opening of LC flow statements obtained, where L/C limits
should be done considered sanctioned for
at the time of necessary, to regular
opening of L/Cs. ensure that the requirements of
borrower would be the borrower such
able to retire the as purchase of Raw
bills on the due Materials should

Page 11
OVERVIEW OF INTERNATIONAL BANKI

All of the above. 4 M 14

A longer usance 2 A 14
period would mean
lesser credit period
which implies
availability of
lesser funds than
needed to run the
working capital
cycle. This would
constrain the unit’s
operations and
lead to a shortfall
All of the above 4 M 14

None of the above. 4 M 14


All are correct

Page 12
SME & NPA & IRAC

S.No. Question Choice1 Choice 2 Choice 3 Choice 4


(Maximum 1000 (Max. 1000 (Max. 1000 (Max. 1000 (Max. 1000
Characters) Characters) Characters) Characters) Characters)

1 A notice under Section After account is In an RG 3 If the dues Both 1 & 3


13(2) of SARFAESI Act classified as NPA. account. exceed Rs. 1 are correct.
may be given in which of lac.
the following cases?
2 A unit was sanctioned a Notice under Action under Notice can be Both 1 & 3
Term Loan of Rs. 50.00 Section 13(2) to be SARFAESI issued only are correct.
lacs on 08.02.2010. The issued for Rs. 9.85 cannot be after three
account was classified as lacs. initiated in the months of
NPA on 15.02.2018 and instant case as account being
the total recoverable the remaining clasified as
amount is Rs. 9.85 lacs. If amount due is NPA.
SARFAESI Action is to be less than 20%
initiated, which of the of principal
undernoted statement is plus interest.
3 A working capital limit of Notice under If the notice Suit for Both 1 & 3
Rs. 25.00 lacs was Section 13(2) of under Section recovery of are correct.
sanctioned to a unit in SARFAESI Act may 13(2) is issued bank's dues
May 2014, which slipped be issued before on 05.05.2017, should be filed
into NPA on 30.04.2017. 24.05.2017. limitation period immediately,
The documents are valid shall be but in any case
upto 24.05.2017. Which automatically before
of the undernoted extended by 60 24.05.2017.
statement is true in this days from date
case? of notice.
4 If a notice issued under If Demand Notices Contents of the Both 1 & 2 are Either 1 or 2
Section 13(2) of could not be notice to be correct. is correct.
SARFAESI Act is returned, served on the published in two
what step is required at Borrower(s)/Guara leading news
issuing branch level? ntor(s), the service papers, one in
should be effected English and one
by affixing a copy vernacular,
of the demand having
notice on the outer sufficient
door where the circulation in
Borrower(s) that locality.
/Guarantor(s)
reside,
photographs of the
same should be
5 Subsequent to issue of Within 15 days of Within 7 days of It is not Within 7 days
notice under receipt of receipt of mandatory on of date of
Section13(2) of SARFEASI objection. objection. part of the letter of
Act, if objection is raised Bank to give a objection.
by the borrower, within reply.
how many days it must

Page 1
SME & NPA & IRAC

Right Ans Category Chapter


(Numeric ( Number
) B-Basic, (Numeric
M-Medium, )
A-Advance,
S-
Situational,
4 G-Grace)
B 15

2 S 15

4 S 15

3 M 15

1 B 15

Page 2
SME & NPA & IRAC

6 Action under Section Action under If any one of the Subject to All 1, 2 & 3
13(4) can be initiated Section 13(4) can notices under account are correct.
after giving notice under be initiated after Section 13(2) is remaining
Section 13(2) of 60 days of returned within
SARFAESI Act. Which of issuance of notice undelivered, limitation
the undernoted under action under period there is
statement is true in this Section13(2). Section 13(4) no outer limit
regard? can be initiated for initiation of
after 60 days of action under
publication of Section 13(4)
contents of after issuance
demand notice of notice under
in two Section13(2).
7 After taking possession of 7 days from date 15 days from 10 days from Publication
the secured assets under of possession. date of date of not
Section13(4) of SARFAESI possession. possession. mandatory if
Act, within how many possession
days publication must be notice is
done in two newspapers? received by
8 When security is held by 50% 75% 60% 25%
more than one Secured
Creditor or jointly
financed by Secured
Creditors, action under
section 13(4) of SARFAESI
Act can be taken if it is
agreed upon by the
Secured Creditors,
representing not less
than ________ in value of
9 When action under 30 45 60 90
Section 13(4) of the Act is
taken by the Bank, the
Borrower(s)/Guarantor(s)
may file a Securitisation
Application before the
DRT u/s 17 of the
SARFAESI Act within
__________ days
10 If a Securitisation 30 45 15 60
Application is filed by the
Borrower(s) and
dismissed by the DRT or
if the DRT refuses to pass
an interim order
restraining further action,
the Borrower(s) may
prefer an appeal before
the DRAT u/s 18 of the
SARFAESI Act, within

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11 Before taking possession Yes. It is Application No. it is not Both 2 & 3


under Section 13(4) of mandatory. before DM mandatory. are correct.
SARFAESI Act, is it required only if
mandatory to file an the Authorised
application before the DM Officer forsees a
under Section 14? resistance in
taking over
physical
possession.
12 The first sale under the 15 45 7 30
provisions of SARFAESI
Act can be conducted
only after expiry of
_________ days notice
given to Borrower(s)/
Guarantor(s)/legal heirs
13 Under the provisions of 15 45 7 30
SARFAESI Act 2002, after
failure of the first sale of
the immovable property,
only __________ days’
notice is required to be
served to the borrower/
guarantor for any
14 Which of the statement/ It is one of the It is a sale Both 1 & 2 are Neither 1 nor
(s) is/ are true in respect methods for sale of process which is correct. 2 are correct.
of sale under 'Private Assets under outside public
Treaty'? SARFAESI Act, auction and is
2002. resorted to only
when public
auction fails.
15 Under SARFAESI Act, 1 2 3 No such
what is the minimum number
number of attempts prescribed.
prescribed for sale by
public auction by the
Bank, before resorting to
sale by private treaty for
properties valued upto
16 If sale under SARFAESI Sale under Private Reserve Price Private treaty Reserve Price
Act for a property has Treaty not may be revised cannot be done may be
failed by way of public permitted under downwards below the price reduced
auction, where reserve the Act. before going for which was maximum by
price was fixed at Rs. 65 private treaty. published in 15% before
lacs, which statement is the newspaper going for
correct if bank wants to while Private Treaty.
sell the property under attempting
17 For filing recovery case 20 15 25 10
before Civil Courts, the
amount of total debt due
from the borrowers
should be less than

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18 For filing recovery case 10 1 25 50


before DRT, the amount
of total debt due from the
borrowers should be
Rs._____ lacs and above.
19 In respect of filing of suit (ii), (iii) & (iv) are (i) & (ii) are (i), (ii) & (iv) All are
before Debt Recovery correct correct are correct correct.
Tribunal for recovery of
Bank’s dues, which of the
undernoted statements
are true:
i. Call up notice to be
served on borrowers/
guarantors through
Bank’s advocate
demanding payment of
Banks dues within 30
days of notice.
ii. The suit application to
be filed needs to be
vetted by Bank’s Law
Officer.
iii. The loan outstanding
may not be necessarily
transferred to recalled
assets account.
iv. In case Bank/ Borrower
or any other party is
aggrieved by the final
decree given by DRT,
appeal may be filed in
DRAT (Debt Recovery
Appellate Tribunal) within
30 days from the date of
20 If an appeal is preferred 15 30 45 60
before DRAT on the
orders of DRT, it should
be filed within how many
days of receipt of order
21 Under the provisions of 30 7 10 15
DRT, if the defendant fails
to file written statement
including claim for set-off
or counter-claim within
30 days, the Presiding
Officer can, in an
exceptional case, extend
the period for further

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22 Which of the statement/ Only recovery Pre Litigation Only 1 is Both 1 & 2
(s) is/ are true in respect cases filed before cases can also correct. are correct.
of settlement under 'Lok court can be be settled.
Adalat' organised by Civil settled.
Court?
23 What is the Bank's Bank should try to Principal More than 50% Compromise
approach in case of recover the amount cannot of interest settlement
Compromise maximum possible be waived should not be may be done
Settlements? dues in order to under waived under only after 2
minimize the Compromise. compromise. years of
sacrifice involved. account being
classified as
24 As per Bank's At least 10% of the At least 5% of At least 15% of At least 7.5%
Compromise Setttlement offer amount may the offer the offer of the offer
Policy, what should be be taken amount may be amount may be amount may
the initial deposit by the taken taken be taken
borrower with the offer
25 What is the treatment of It should be It should be It can be Both 2 & 3
upfront amount received immediatley held in a no- appropriated in are correct.
with the compromise credited to loan lien account on the borrower's
offer letter from the account on receipt. receipt. account if the
borrower? compromise
offer as
proposed by
the borrower is
approved by
competent
authority.
26 Is compromise Not Permitted. Permitted after Rate of interest Both 2 & 3
settlement permitted taking in- on deferred are correct.
with a Wilful Defaulter? principel payment of
Which of the statement/ approval from compromise
(s) is/ are correct? GM. amount in case
of Wilful
Defaulters in up
by 3% than in
normal cases.
27 What do we mean by It is decree by the It is decree by It is decree by It is to be
Consent Decree? Court with consent the Court with the Court with obtained from
of both the parties consent of the consent of appropriate
i.e. Bank & Bank. Borrower only. court
Borrower. subsequent to
failure of
compromise.
28 Which of the statement/ Compromise Compromise Compromise Both 1 & 3
(s) is/ are true in respect proposal may be proposal cannot Settlement are correct.
of compromise proposals taken from be taken from proposals from
from guarantors? guarantor. guarantor. guarantors
should be
treated on par
with proposals
from borrowers.

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29 Who is the Regulatory Reserve Bank of Insolvency & Securities and National
Authority under the India Bankruptcy Exchange Financial
Insolvency & Bankruptcy Board of India Board of India Regulatory
Code 2016. Authority.
30 As per the Insolvency & NCLAT Supreme Court High Court DRAT
Bankruptcy Code 2016,
appeal against the order
of NCLT lies
with___________ .
31 The CIR process under 1 lakh 10 lacs 25 lacs 5 lacs
the Insolvency &
Bankruptcy Code can be
triggered in the event a
corporate has committed
a default of Rs.
_____________ or more in
32 Under the IBC, who is an Financial Creditor. A supplier of Creditors to Both 2 & 3
operational creditor? any goods or whom are correct.
services to the operational
company. debt is owed
33 A Corporate Insolvency Financial Creditor. Operational Corporate Either 1, 2 or
Resolution Process may Creditor Debtor 3
be initiated by:
34 What are the triggers Where the CIR Creditors The corporate Either 1, 2 or
under which liquidation process fails and representing debtor 3
process may be initiated no resolution plan 75% of the contravenes
under the IBC 2016? is approved by the outstanding the CIR
Committee of financial debt process, in
Creditors(CoC) resolve to which case,
liquidate the anyone
corporate prejudicially
debtor. affected can
apply for
35 What are the rights of a A secured creditor A secured A secured All of the
secured creditor during in the liquidation creditor in the creditor in the above are
liquidation? proceedings may liquidation liquidation correct.
stand within the proceedings proceedings
liquidation process may stand may stand as
outside unsecured
liquidation creditor for
process unrealised
amounts if
proceeds of
secured assets
are not
adequate to
realise the
36 What is the timeline 3 years 2 years 180 days 270 days
prescribed under IBC for
completion of liquidation
process?

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37 NCLT is required to 21 7 14 15
accept/ reject the
application filed either by
Secured Creditor,
Operational Creditor or
Corporate Debtor within
38 Insolvency Professional, NCLT accepts the The order of Management is The account
under IBC, will take over application filed liquidation by not taken over of the
management and control either by Secured NCLT. by the Corporate
of the Corporate Debtor Creditor, Insolvency Debtor
immediately after: Operational Professional becomes NPA.
Creditor or under IBC.
39 What is meant by Insolvency is a Insolvency is a Insolvency is a Both 1 & 3
Insolvency? situation where situation where situation which are correct.
liabilities of a assets of a arises after
person/firm exceed person/firm Bankruptcy.
its assets and is exceed its
unable to pay debt liabilities and is
obligations. unable to pay
debt
40 What is true about IUs will be a The records IUs are entities All of the
Information Utilities (IUs) storehouse for available with who will be above are
under IBC? financial the IUs will be registered with correct.
information of utilised to prove and licenced by
companies, LLPs, default, security the IBBI.
partnerships and interest and
individuals under existence of a
the Code. dispute in
respect of a
41 Regarding Corporate CIRP to precede Liquidation can Timeline Both 1 & 3
Insolvency Resolution Liquidation. be ordered by available for are correct.
Process (CIRP) & NCLT without CIRP is 180
Liquidation under IBC, initiation of days which
which of the undernoted CIRP. may be
statements are correct? extended by
NCLT by further
42 A credit facility in the Yes, can be issued No, because the Cant say with Data provided
nature of Term loan was as the total remaining dues available is insufficient
sanctioned to M/s XYZ amount due are less than information. to decide.
and Company to the tune exceeds Rs. 1 lac. 20% of principal
of Rs. 500.00 lacs on plus accrued
11.08.2009. The account interest and
became NPA on SARFAESI Action
27.04.2018. The total is not applicable
amount recoverable from in such case.
the said unit as on
25.05.2018 is Rs. 93.75
lacs. Can a notice under
Section 13(2) be issued,
if the account is
otherwise eligible to be

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43 Is any approval required In respect of No approval to In respect of Both 1 & 3


to be taken before exposure upto Rs. be taken before exposure above are correct.
issuance of notice under 25 crore, Branch issuance of Rs. 25
Section13(2) of SARFAESI Head of notice under crore,approval
Act? incumbency Scale Section 13(2). from
IV and above and GM(Network/
Controllers in case CCG/CAG/SARG
of branches of )
incumbency Scale
44 Is any approval required No approval is Approval must Before initiating Approval
before initiating action required before be obtained action under required only
under Section 13(4) of initiating action from Controllers Section 13(4), at the time of
SARFAESI Act? under Section before initiating branch should initiating
13(4). action under invariably action under
Section 13(4). obtain approval Section 13(2).
from the
authority
empowered to
transfer the
exposure to
Recalled Assets
45 What is the notice period 45 days 30 days 60 days from 60 days from
under Section 13(2) of the date of the date of
SARFAESI Act? notice or date receipt of
of publication notice.
of CONTENTS of
13(2) in case of
return of
notice,
whichever is
46 A unit was sanctioned Yes, BG No, BG To be included Both 1 & 3
credit facilties as under: outstanding must outstanding only after are correct.
CC- Rs. 500.00 lacs, BG be included. cannot be taking approval
Limit Rs. 100.00 lacs. The demanded at of Controller.
unit's credit facilities this point of
were classified as NPA on issuance of
25.04.2018.The notice, as the
outstandings as on liability is yet to
30.04.2018 are CC - Rs. fall on the Bank.
512.50 lacs, BG - 57.50
lacs. Should the BG
outstanding of Rs. 57.50
lacs be added to the
amount demanded by
the Bank while issuing
notice under Section

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47 Under the provisions of Borrower may Borrower may Borrower's right Borrower
SARFAESI Act, borrower's redeem the redeem the to redeem the cannot
Right to Redeem back the charged properties charged charged redeem the
charged properties, after at anystage of properties only properties after charged
payment of bank's entire SARFAESI Action before bank's payment of properties
dues, is available upto after payment of action under entire dues is from the Bank
which stage of SARFAESI bank's entire dues. Section 13(4) of limited to after initiation
action? SARFAESI after publication of of SARFAESI
payment of Sale Notice by Action.
bank's entire the Bank.
dues .
48 After taking possession No, it is not Yes, a copy May be It should
under Section 13(4) of required. must be provided after never be
SARFAESI Act, should the provided as per obtaining provided as
borrower provided with a the amended controller's per the
copy of Panchnama & provisions. permission. provisions of
Inventory? the Act.
49 Is it mandatory that the No. It is not It is for the Yes, it is A view may
sale consideration offered mandatory. Authorised mandatory. be taken by
by the proposed Officer to take a the Contolller
purchaser to view. of the branch.
whom the property is to
be sold by private treaty
under the provisions of
SARFAESI Act should be
higher than the reserve
price fixed by the
50 What is the amendment No such Written consent Property must Such sale
carried out for sale by amendment has of mortgagor is be sold only by shall be on
Private Treaty under been carried out. a must before Public Auction. the terms as
SARFAESI Act provisions? selling any may be
property under settled
Private Treaty. between the
secured
creditors and
the proposed
purchaser in
51 What is the maximum 30 days 15 days 3 months 45 days
period permitted under
SARFAESI Act for
payment of entire bid
amount by the successful
52 When the Bank decides 7 15 30 45
to sell the immovable
secured assets through
private treaty
after failure of sale under
public auction, notice of
not less than _________
days to the borrower
before the date of sale
through private treaty is

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53 What is the minimum 3 4 1 2


number of attempts
prescribed for sale by
public auction by the
Bank under SARFAESI
Act, before
resorting to sale by
private treaty for value of
54 The immovable secured By obtaining By holding By private Any of the
assets taken possession quotations from public auction treaty above options
by the Authorised Officer the persons including may be used.
under the provisions of dealing with the through e-
SARFAESI Act may be similar secured auction mode
sold under which of the assets or
following methods? otherwise
interested in
buying such assets
55 Can the demand notice Yes, it may be No, hand It is for the A view may
under Section 13(2) of served through delivery is not Authorised be taken by
SARFAESI Act be served hand delivery. permitted. Officer to take the Contolller
through Hand Delivery? a view. of the branch.
56 As per the Security Asstt. General Chief Manager Manager Branch
Interest (Enforcement) Manager Manager
Rules, 2002 (the Rules),
‘Authorised officer’
means an officer not less
than a __________ of a
public sector bank or
57 Is the date of NPA May be mentioned. It is for the NPA date NPA date
required to be mentioned Authorised should never must be
in the demand notice Officer to take a be disclosed in correctly
under Section 13(2)? view. the demand mentioned in
notice. the demand
58 Who is having the Authorised Officer Branch Manager Regional Bank is not
responsibility to take care or his custodian, of the branch Manager or his having any
of the property on behalf of the custodian on responsibility
subsequent to possession Bank. behalf of the towards the
taken by the Bank under Bank. property
the provisions of taken into
SARFAESI Act? possession.
59 If a property is not sold at Reserve Price may Reserve Price Reserve Price Reserve Price
the Reserve Price fixed by not be reduced by may not be may not be may not be
the Bank, it may be more than 10% on reduced by reduced by reduced by
reviewed downwards failure of auction. more than 15% more than 5% more than
upto what extent? on failure of on failure of 20% on
auction. auction. failure of

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60 What is rule 8(6) under The authorised The authorised The authorised The
the Security Interest officer shall serve officer shall officer shall authorised
(Enforcement) Rules to the borrower a serve to the serve to the officer shall
2002? notice of 30 days borrower a borrower a serve to the
for sale of notice of 7 days notice of 10 borrower a
immovable for sale of days for sale of notice of 45
secured assets. immovable immovable days for sale
secured assets. secured assets. of immovable
secured
61 What is the timeline No timeline is Civil suit is to be Civil suit is to Civil suit is to
prescribed for filing of prescribed by the filed be filed be filed
suit before Civil Court for Bank. immediately on immediately on immediately
recovery of Bank's dues? approval but in approval but in on approval
any case within any case within but in any
a maximum a maximum case within a
period of 3 period of 45 maximum
months from days from the period of 6
the date of date of months from
approval. approval. the date of
62 What are the timelines Original No timeline is Original Original
prescribed by the Bank Application (OA) is prescribed by Application Application
for filing of Original to be filed in DRT the Bank. (OA) is to be (OA) is to be
Application before the immediately on filed in DRT filed in DRT
DRT? approval but in immediately on immediately
any case within a approval but in on approval
maximum period any case within but in any
of 3 months from a maximum case within a
the date of period of 2 maximum
approval. Where months from period of 6
documents are the date of months from
getting time approval. the date of
barred, Original Where approval.
Application (OA) in documents are
DRT is to be filed 2 getting time
months before barred, Original
expiry of Application
documents. (OA) in DRT is
to be filed 3
63 What is the maximum Rs. 2.00 lacs Rs. 2.50 lacs Rs. 1.50 lacs. There is no
cap for court fee when upper cap
filing recovery suit before towards court
DRT? fee for filing
of recovery
case in DRT.

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64 What do we mean by the The uncharged The name of the The charged The
term 'Attachment before assets cannot be legal heirs must assets may be uncharged
Judgment'? attached by the be impleaded in attached by the assets may
court for recovery the court case court for be attached
of bank's dues. after death of recovery of by the court
the guarantor. bank's dues. for recovery
of bank's
dues subject
to the
condition that
charged
assets are
insufficient to
cover the
65 In DRT, what is the 30 days 60 days 15 days 45 days
limitation period for
filing an application for
review against an order
of the Tribunal, on
account of some mistake
or error apparent on the
face of the record?
66 What change has been Form I has been Form I has Form I has No
incorporated in Form-I, amended to been amended been amended amendments
i.e. form in which the incorporate the to incorporate to incorporate have been
Original Application is details of the the details of the details of carried out in
required to be filed secured assets. the secured the legal heirs. Form I.
before the Debt assets,
Recovery Tribunal for estimated value
recovery of bank's dues? of the secured
assets, the
details of the
properties or
other assets of
the defendant
known to the
applicant
bank/FI but not
secured or
charged in
67 No appeal shall preferred 50% 75% 100% 60%
by a person against the
order of the Debt
Recovery Tribunal shall
be entertained by the
Appellate Tribunal unless
such person has
deposited _________ of the
amount of debt so due
from the said person as

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68 Monetary ceiling of cases 10 lacs 15 lacs 20 lacs 25 lacs


to be referred to the Lok
Adalat organized by Civil
Courts is Rs. __________.
69 What discretionary An in-principle The official A maximum of A maximum
powers are available to approval for representing 50% interest of 25%
an official attending the compromise the bank is concession interest
Lok adalat on behalf of settlement from vested with full may be concession
the Bank? the appropriate powers to settle permitted by may be
authority for accounts under the official permitted by
scaling down the Lok Adalat. attending Lok the official
dues is to be Adalat on attending Lok
obtained before bank's behalf. Adalat on
participating in the bank's behalf.
Lok Adalat. The
official
representing the
Bank would be
authorised for
scaling down of
the dues to the
70 Is a formal sanction for Not required as May be taken if Controller's Formal
compromise settlement order is given by Branch Manager prior approval sanction of
necessary after award of Lok Adalat. of the is sufficient. the
decree by Lok adalat? concerned competent
branch is of the authority will
incumbency of have to be
MMGS III or obtained. The
below. proposal for
such sanction
will record the
confirmation
of the in-
principle
71 In compromise 5 years 3 years 2 years 7 years
settlement cases for
calculation of NPV of
realisable value of
securities, the maximum
estimated time to realize
the securities may be
taken as _______ from the
date of notice under
section 13(2) in case of
SARFAESI action.

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72 In compromise 2 years 7 years 5 years 3 years


settlement cases for
calculation of NPV of
realisable value of
securities, the maximum
estimated time to realize
the securities may be
taken as _______ from the
date of filing suit in case
of DRT / Court cases.

73 Normally, the time 6 months 24 months 12 months 18 months


permitted for repayment
of entire compromise
settlement should not
exceed _______ months.
74 Bank's approach to Value of securities Other assets of Ability of the All of the
compromise as a charged to the the borrowers / Bank to enforce above are
recovery option should Bank and their guarantors the security correct.
be based on an analysis saleability
of which of the following
strenghts and
weaknessess for any
75 The appropriate authority The amount of net Compromise Compromise No approval is
to approve a compromise loss to be written proposal can be proposal upto required for a
proposal will be: off will be the approved by the Rs. 5.00 crores compromise
criteria to decide Controllers can be proposal.
the competent irrespective of approved by
authority amount. the Controllers.
irrespective of the
outstanding in the

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