Ka Set 

THE INSTITUTE OF BANKERS, BANGLADESH (IBB) 

Banking Diploma Examination, July, 2018 DAlBB Lending Operation & Risk Management.(LRM) 

Time-3 hours Full marks--100 

Pass marks-50

[N.B.-AII questions carry equal marks. Answer any five questions. Diferent parts of a question should be answered in a same place] 

1.(a) What is creditworthiness? Discuss the points those are essentially to be considered by a banker while assessing the creditworthiness of a perspective borrower. 

(b) State how will you deal with existing borrower needing enhancement of the creditability. 

2. (a) Define the SME credit in the light of Bangladesh Bank’s guidelines and mention the booster sector. 

(b) Bangladesh Bank has of late made some changes as regards provisioning on SME loans, but some banks are reported to have been measuring the revised concept through unfair convension of some other loans to SME loans. Give your opinion on the matter. How to relief to this unfair Situation? Please suggest. 

3. (a) Distinguish between Lending Risk Analysis (LRA) and Credit Risk Grading (CRG). Write down the expected CRG requirement for extending credit. 

(b) Explain the risk factors that make an industry sick. How would you proceed to consider rehabilitation needed of a sick project? 

4. (a) Define portfolio management. Highlight the role of responsibility of Branch Manager in respect of borrower selection and loan processing. 

(b) What will you do when a loan proposal does not fall within set criteria of approved credit policy but the applicant affears to be potential and helpful for the bank’s branch? 

5. (a) Define ALCO and its formation structure. Discuss the role and responsibility of ALCO for profer leading of a bank. 

(17) Do you think that the absence of asset liability management in the bank may cause damage to its image and foundation? Elaborate your answer. 

(a). Define Green banking as per Bangladesh Bank’s guidelines Discuss the importance and need of green banking in the context of present and future global warming situation of the country 

(b) Briefly give a resume of green banking activity of your bank/institution 

(a) What is provisioning? Discuss the basis of determining the status of classified loans and advances. 

(b) Is it due to the increase of classified loans of the bank that they now facing liquidity problems and borrow interbank call money at very high rate? Justify the view. If you areagreed or not agree- comment. 

(a) What do you mean by a project and its app1aisal? During appraisal of a project loan proposal what factors does a banker take into consideration? Please explain. 

(b) Mr. Ahmed Ali an enterprise of your branch area has applied for a loan of Tk. 20,00,000 to establish a nursery project (to ensure green banking) to your branch. Please write an appraisal report of the banks loan proposal explaining the following points -

(i) About the applicant 

(ii) About the enterprise (nursery) 

(iii)About the security, calculating maximum credit Limit (MCL) 

(iv) About the credit needs , 

(v) About the income and expenses ie. profitability

(Vi) About marketing 

(Vii) Recommend loan amount considering the above analysis. 

9. (a) Banks usually extend credit against securities. Please list down the different types of securities against which Banks sanction loans to its c1ient. Discuss their advantages & disadvantages in brief. 

(b) In selecting a borrower, if it is perfectly made, “Loan cannot term into bad”. Elaborate your comment on this statement. 

Write short notes on five of the following: -

a) Debt: Equity Ratio; 

(b) .Bankers Book Evidence Act; 

(C) MicroCredit Regulatory Authority (MRA);

d) CAMELS Rating; 

e) Sensitivity Analysis for a p1oject loan Appraisal;

f) Bill of lading  

g) Single Borrower exposure 

h) G.S.P