Various Information

Credit Risk Management Policy Part 1

1. Sources of Credit Risk are:
i. Non repayment of principal or interest in case of direct lending.
ii. Funds not forthcoming from the constituents upon the crystallization of liability in case of Letter of Credit (LC), Letter of Comfort (LOC) and Guarantees.
a) (i) only
b) (ii) only
c) (i) and (ii) both
d) None of the above

2. Which of the following is a Board Level Committee?

a) Risk Management Committee (RMC)
b) Credit Risk Management Committee (CRMC)
c) Operational Risk Management Committee (ORMC)
d) Market Risk Management Committee (MRMC)

3. Composition of Risk Management Committee RMC is:
a) CMD and Three directors approved by the Board
b) CMD and RBI nominated Director
c) ED and Three directors approved by the Board
d) CMD, ED and Two directors approved by the Board

4. Credit Risk Management Committee (CRMC) is headed by
a) Chairman and Managing Director
b) Executive Director
c) GM, Integrated Risk Management
d) Chief Compliance Officer

5. Which of the following is not a function of CRMC?
a) Implementation of the credit risk policy/strategy approved by the Board
b) Monitoring credit risk on a bank-wide basis and ensure compliance with limits approved by the Board
c) Define the Bank’s operational risk strategy and appetite
d) Reviewing rating system validation results

6. The CRMC meeting should be held at least once in a
a) Year
b) Half-year
c) Month
d) Quarter

7. Which of the following is an instrument for Credit Risk Management?
a) Credit Approval process
b) Prudential / Exposures limits
c) Credit Rating Framework
d) All of the above

8. Credit Approval Grid functions at
a) Head Office Level only
b) Head Office Level, Zonal Office Level, TIBD Level and Grade IV, V and VI ranked branches
c) Head Office Level, Zonal Office Level and All branches
d) Zonal office Level and TIBD Level

9. Credit Approval Grid shall meet
a) Once in a Week
b) Once in a Month
c) As and when necessary
d) Once in a Year

10. The various prudential limits as per Exposure Norms for individual and group borrowers are calculated as a percentage of:
a) Capital Funds
b) Net worth
c) Total Assets
d) Total Liabilities

Other Links
Credit Risk Management Policy Part 2
Credit Risk Management Policy Part 3
Credit Risk Management Policy Part 4
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