CAIIB ABM UNIT 31 – Credit Control and Monitoring

Discussion 28.09.2018

1. Which of the following is not a purpose of credit monitoring? The choices are:

(a) To ensure end use of the funds by the borrower

(b) To detect any deterioration in the security charged to the bank

(c) To comply with the guidelines of the RBI

(d) To ascertain that the business continues to run on the projected lines

The correct choice is..  (c) To comply with the guidelines of the RBI

2. Which of the following is not a tool available to check the bank for credit monitoring?

The choices are:

(a) Sending regular reminders to the borrower

(b) Periodic visits to the business place for inspection

(c) Analysis of financial statements

(d) Examine conduct of borrower's account

The correct choice is..  (a) Sending regular reminders to the borrower

3. Which of the following is not a method for detecting wrong mention of inventory in a stock statement? The choices are:

(a) Stock audit

(b) Inspection of stocks

(c) Analysis of financial statements

(d) Cross-check from the balance sheet figure

The correct choice is (c) Analysis of financial statements

4. Which of the following is not a method for detecting wrong mention of receivables in stock statement submitted by the borrower? The choices are:

(a) Analysis of financial statements

(b) Cross check from the balance sheet figure

(c) Receivables audit

(d) Inspection of books of account

The correct choice is..  (a) Analysis of financial statements

5. Which of the following is not a danger sign about the direction of business of the borrower? The choices are:

(a) Devolvement of L Cs, invocation of Bank Guarantees

(b) Demand for higher limit

(c) Delays in submission of stock/receivables statements

(d) Return of cheques or bills

The correct choice is.. (d) Return of cheques or bills

6. Which of the following is not an unsatisfactory sign in conduct of the account of the borrower? The choices are:

(a) Delay in payment of interest or instalments,

(b) routing of transactions with some other bank

(c) Frequent over drawings

(d) High turnover

The correct choice is (d) High turnover

7. Which of the following is not the purpose credit audit? The choices are:

(a) Improvement in the quality of credit portfolio

(b) Review sanction process and compliance status of large loans

(c) Feedback on regulatory compliance

(d) Stock inspection

The correct choice is (d) Stock inspection

8. Purpose of appointing bank’s nominee on company’s board of borrowing company is:

The choices are:

(a) To keep a tab on the important decisions of the board

(b) To be a part of the management

(c) To guide the company for better working

(d) To safeguard the securities charged to the bank

The correct choice is (a) To keep a tab on the important decisions of the board

9. Sonal: Which is not a rating agencies

CARE
ICRA
ISDA
CRISIL
SMERA
Ans- ISDA

10. ........... is an examination of various credit functions of bank.
Ans- Credit Audit

11. Sonal : Legal audit of title of documents in respect of large value loan amount up to
5 crore
2 crore
5 crore & above
Up to 5 crore
Ans-5 crore & above

12. Sandeep Nikam: Frequency review for 
High
Medium 
And low risk
Ans- 3 months, 
6 months, 
1 yr

13.  Sandeep Nikam: Audit report should be submitted ? Duration ?
Ans- Half Yearly

14. Sonal : Drawing power calculate on the basis of .......?
Ans- Stock & receivable

15. Sugitha : Credit auditors ....... Required to visit borrowers factory/ office premises
Ans- not required

16. Explain deterioration of security
Ans-

Correct me for any mistake. Update more qus in comments.

Thanks Team - Selvaraj T, Sandeep Nikam, Sonal, Tt,Lalu Poddar, Manju, Roselin,Devil,Divan Batcha,Sugitha