Overview of Credit Management
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 122 rapid-fire Q&A cards.
What is the core revenue-generating activity of commercial banks?
Lending (loans and advances); profit comes from spread between deposit cost and lending yield.
Name the five classical principles of lending.
Safety & Security, Risk Diversification, Profitability, Liquidity, Purpose.
What does the Safety & Security Principle require banks to assess?
Borrower's economic capacity, commercial capability, financial strength, management quality, and credit history.
Which RBI framework caps exposures to single counterparties and groups?
Large Exposure Framework (LEF) and prudential exposure norms.
What is the Liquidity Principle in credit management?
Banks must match asset–liability maturities so loans recover timely to honour deposit withdrawals.
Define the Purpose Principle.
Funds must be lent for productive, lawful, clearly identified purposes with end-use monitoring.
What are the four RBI business-segment reporting categories?
Treasury, Retail Banking, Corporate/Wholesale Banking, Other Banking Business.
Which legal entity has no separate legal identity from its owner?
Sole Proprietary Firm.
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