T13 – 5R Strategic Consultancy Sdn Bhd

Certificate in Credit
Test 13

Name

Which of the following is the right sequence of Credit Process Cycle?

i	Origination
ii	Credit Administration
iii	Monitoring and Control and
iv	Recovery

i	Origination
ii	Credit Administration and Monitoring
iii	Credit Recovery and
iv	Credit Control, Review and Analysis

i	Defining a Written Report
ii	Credit Risk Analysis and Structuring for Loan Approval
iii	Loan and Security documentation for the New Loan
iv	Loan Monitoring and Control and
v	Loan Settlement and Recovery

i	Marketing
ii	Credit Evaluation and Structuring
iii	Credit Approval
iv	Documentation and Disbursement and
v	Monitoring, Control and Recovery

Which CAMPARI element reviews the borrower's justification for the financing?

Ability

Margin

Amount

Purpose

Credit process involves risk taking. What is the most necessary step for risk management?

Control risk

Identify risk

Mitigate risk

Eliminate risk

Under Sec. 143 of FSA 2013, a licensed person may disclosed information without customer consent in all the following EXCEPT

When required by a court order

When required by Bank Negara Malaysia

When requested by another bank for marketing purpose

When necessary for due diligence in a merger

Under Malaysian Law, which of the following Types of Borrowers has unlimited liability?

Sole Proprietorship

Co-operation Society

Private Limited Company (Sdn Bhd)

Public Limited Company (Bhd)

The 'Principle of Proportionate Stake' implies that

I. Lenders must ensure that business owners must be sufficiently committed
II. The margin of financing will be less than 100%
III. Lender must ensure that its collateral arrangement position for the same borrower relative to other lenders is not worth off
IV. That credit must always be secured

II and III only

I and III only

I and II only

Ill and IV only

Key Responsible Persons refer to persons that are accountable or responsible for the management or oversight of the FI. This Comprise

I. Directors
II. Members of Shariah Committee
III. Chief Executive Officer
IV. Senior Officer

I, II and III

I and III

I, III and IV

All the above

Prior to 1986. housing loans were not extended for more than 10 years. Currently tenors can be extended to 25 years. This is possible due to the ________

Competitive pressure in the banking industry

Steady growth in housing industry

Establishment of Cagamas Berhad

Bank excess liquidity

In CAMPARI, the ‘C’ stands for:

Character

Collateral

Capacity

Conditions

What is typically included in a CCRIS report?

Outstanding credit facilities and payment behaviour

Legal cases

Employment history

Insurance claims

Bad and incomplete information used by the credit officer to make loan recommendation will lead to the following risk

Information Risk

Credit Risk

Fraud Risk

Default Risk

What is the primary role of the Capital Market System?

facilitate the pooling of both long and short-term funds for financing needs

Facilitate the pooling of short-term funds and longer term financing needs

Complement banking system in mobilising funds in the economy

Facilitate the pooling of long-term funds and longer term financing needs

The parent company of a corporate structure own all or more than 50% of issued shares of mother company is called

Subsidiary Company

Associates Company

Holding Company

Related Company

Which of the following is the first commercial bank in Malaysia?

Oversea- Chinese Banking Corporation in Melaka

Chartered Mercantile Bank of India, London and China in Penang

Standard Chartered Bank of India, London and China in Penang

First Oversea Bank Ltd

The purpose of Section 50 (Single Counterparty Exposure Limit) under FSA 2013 is to:

Ensure banks lend more to SMEs

Promote financial inclusion

Encourage mergers among financial institutions

Limit excessive credit exposure to a single borrower or group

Verification of credit information from internal bank records is considered:

External verification

Secondary source

Non-reliable

Primary source

Which of the following is the primary regulator of banking institutions in Malaysia?

Credit Guarantee Corporation

Bursa Malaysia

Bank Negara Malaysia

Securities Commission Malaysia

Verification of company ownership is done via:

Form 24, 49, Constitution

MyKad

Income tax return

BNM website

Which of the following is NOT under the six institution prescribe under DFIA

Bank Simpanan Nasional

Export - Import Bank of Malaysia Berhad

Bank Kerjasama Rakyat Malaysia Berhad

Malaysia Industrial Development Finance Berhad

Which of the following are explicit reasons for the need of Legislative and Regulation Control over the banking system to safeguard the public interest?

I. Faciliting the process of financial intermediation
II. Ensuring the banking system players perform their fiduciary duty
III. Maintaining publics trust within the banking sector
IV. Protecting the banking system from malicious or accidental human intervention

I and II

II and III

I, II and III

All the above

Which of the following best describes a Code of Ethics?

Moral principles or values deem to be good for a group and generally accepted and practice voluntarily as a guide for good conduct

A legally binding set of rules that govern employee behavior

Set of checklist for compliance with rules and regulation

A technical manual that outline how to perform a task correctly and safely

What is the main objective of the Government Investment Act 1983?

Enable government to invest in Islamic Banks

To enable Islamic Bank to comply with statutory reserve requirements

Allows Islamic bank to issue Islamic bonds

Empower government to issue government Investment Certificates on Islamic basis

Which of the following are the key components of the credit culture strategy?

i. Promotion and adherence of the credit culture across the bank
ii. Adoption of "quality first" policy in all credit decisions with little or no exception
iii. Continuing training and reminder of credit ideals at all level of operations
iv. Recognition and rewards of best credit practices within the bank

III and IV only

I, II and III only

I and II only

All of the above

The Power of Attorney must be attested by a commissioner of oaths or a lawyer and registered at

Magistrate Court

High Court

Land Office

Registry Office

A winding-up order is most relevant to:

Companies

Sole proprietors

Natural persons

Partnerships

With reference to Diagram 1, which category of borrower can be recommended for approval?

Diagram 1

PAYMENT HABITS	Good habit	A	B
	Bad habit	D	C
		Poor Ability	Good Ability
		CAPACITY TO REPAY

Category C

Category B

Category D

Category A

Which is the feature of Maturity Phase in the Industry Life Cycle?

Proven and markets are established

More competitors overcrowd the industry and profit margin drops

Competitors leave the industry and force to close shop

Industry is clearly viable and making good progress with strong profit

If you decide to recommend Category A for approval, which of the following strategy you may adopt?

Lengthen the Loan Tenor

Reduce the Loan Amount

Shorten the Loan Tenor

Applicant to provide additional security

The main purpose of corporate governance in a financial institution is to:

Increase loan disbursement speed

Ensure accountability and protect stakeholder interests

Reduce the size of the Board of Directors

Maximize executive compensation

An example of a money market instrument is:

Preference shares

Equity shares

Treasury bills

Sukuk

Foreign Exchange Administration (FEA) Rules are administered by

Labuan Financial Services Authority

Companies Commission of Malaysia

Bank Negara Malaysia

Security Commission

Regulation of credit token companies will come under the purview of the following:

Company Act 1965

BAFIA 1989

DFIA 2002

Payment System Act 2003

Which of the following is/are true about accessing “Character" for consumer lending?

I. Borrower's age
II. Marital status
III. Occupations
IV. Income pattern

I, II and III

II and III

I and II

All the above

Which of the following is NOT a characteristics of a sole proprietorship?

Unlimited liability

Easy to set up

Seperate legal entity

Owned by one individual

Which of the followings are defined as "Resident" by Foreign Exchange Administration?

I. A citizen of Malaysia, excluding citizen who has obtained permanent resident status in a country outside Malaysia and residing outside Malaysia
II. A Body corporate incorporated or established or registered with or approved by authority in Malaysia
III. Embassies, Consulate, High Commission, Supranational or International Organisation
IV. An overseas branch, a subsidiary, regional office, sales office or representative office of a resident company

III and IV

I and IV

I only

I and II

Which of the following best defines conflict of interest?

When two employees compete for promotion

When an employee accepts tasks from multiple departments

When a manager disagrees with a subordinate

When personal interests interfere with professional duties

Except for legal firm and professional practices, the numbers of partners in Partnership is

2 to 20

2 and more

Which of the following may rais a red flag during credit verification in Consumer Lending?

Positive Nettworth

Qualified Audit Report

Heavy use of open-ended account

Undisclosed creditors and liabilities in loan applicant form

Initial Capital contribution in the business and collateral furnished as Loan Security is included in the following scope of the Credit Assessment

Financial feasibility and sources of future cashflow

Commitment for present and future

The borrower and its background

Collateral and Security arrangement for protection

Which of the following has the characteristic of perpetual succession?

Joint account holders

Private limited company

Partnership

Sole proprietorship

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Certificate in Credit
Test 13