Certificate in Credit T9 – 5R Strategic Consultancy Sdn Bhd

Name

Which of the following are the major purposes of credit analysis?

i. Conduct Risk Assets Acceptance Criteria (RAAC) for every applicant
ii. Examine the nature of business in context of its industry
iii. Identify and quantify the business risks
iv. Evaluate the business cash flow and recommended a suitable type and structure of loan facility

II and III

All the above

I only

II, III and IV

Which of the following is the best definition of credit culture?

Set of policy articulated at the board level with guidance from BNM to be implemented by the Senior Managements

Set of principles provide guidelines for banking supervisor authorities to evaluate credit risk management process

Set of values accepted by everyone in the bank to protect the bank from poor quality loan assets

Set of credit principles to be adopted by bank

Once the prepared application is acceptable to the bank, the Credit Office will proceed with the following activity

Prepare the Credit Packages for approval of the relevant authority

Proceed to structure the proposed credit facilities that meet the borrowers requirements while complying with the bank lending guideline

Proceed to prepare Credit Documentations for Disbursement

Appoint a solicitor to prepare facilities agreements and security documentations

The most important Risk Management Process in Lending is

Identify the risks

Avoid the risks

Quantify or assess the risk

Mitigate the risks

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

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

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

Which of the statements is true for Principle of Proportional Stake?

Security arrangements and credit support from a borrower should be provided to all lending banks on a pari passu basis

The best type of loan is where the source of repayment is contained in the purpose of Loan

As equity risk taker, the borrower must show more commitments upfront compared to the lending bank

Short term Loans are for short-term purposes and long term loan should be for longer term purpose

Which of the following is NOT principles of Lending?

Principle of Risk Taking

Principle of Contract

Principle of Prioritizing Credit Quality

Principle of Good 1st Way Out

Which of the following is NOT included in the scope of Credit Risk Assessment?

Identify, Quantify and Mitigate Risks

Collateral and Security Arrangement

Borrower's Financial Feasibility

Key informations about borrower

Which of the following is NOT included as the keys Risk Asset Acceptance Criteria (RAAC) for Lending Risk

Collateral and any recent history of poor credit record

Potential Repayment Ability

Source of Income and Cashflow

Scope of Credit Risk Assessments

Which of the following is the core principle of Credit?

Productive and purposeful lending

Principle of Control

Risk diversification

Principle of Protection

Which phase of Credit Process Cycle responsible to cover the on-going supervision Loan Account to ensure that all obligations agreed by the borrower are met in a timely manner

Credit Risk Analysis and Structuring for Loan Approval

Loan Settlement and Recovery

Loan and Security Documentation for New Loan

Loan Monitoring and Control

What is the purpose of Credit Risk Analysis?

Provide the basis to form an opinion on repayment risk of the Loan applicant

To identify and mitigate risk to ensure the risks are under control or minimized

To make good credit decision

Ensure the applicant qualify for RAAC

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

The borrower and its background

Collateral and Security arrangement for protection

Financial feasibility and sources of future cashflow

Commitment for present and future

To ensure separation of duties which of the following statements is true

The process of Loan and Security documentation and disbursement should be performed independently of individuals involved in Credit Risk analysis and structuring for Loan Approval

The process of Credit Marketing should be perform independently of individuals involve in Credit Risk analysis

The process of recovery should be performed independently of individuals involves in Loan and security documentations

The process of monitoring should be performed independently of individuals involved in the credit administration

The Credit Facilities should be structured appropriately in order to meet the following except

The purposes as recommended by the Credit Officer

The purpose of the facilities

To address the risks identified

The requirements and repayment ability of the borrower

Computation of 1st Way Out is included in which scope of Credit Risk Assessment

Borrower's Commitment

Borrower's background

Borrower's external operating environment

Borrower's Financial Feasibility

Which of the following are the duties of Marketing Officer?

i. Assesses and makes a decision on the loan application
ii. Ensures that loan terms are made in accordance with the basic risk criteria
iii. Make decision based on Principle of Lending after a through assessment of the borrower's credit risk
iv. Disburse loans in accordance with loan documentation and bank policy

All the above

III and IV

I and II

I and III

Which of the following purposes are considered as unproductive loan?

i. To purchase equipment of a manufacturing company
ii. Loan to manufacturing company to pay dividends to shareholder
iii. Loan to manufacturing company to invest in proven technology
iv. Loan to manufacturing company to repay outstanding Fixed Loan

I and III

II and IV

None of the above

I and IV

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

All of the above

I and II only

Which of the following is Blacklist Information?

CTOS

None of the above

CCRIS

BMC

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