Credit Analyst Exit Test

Which of the following is the primary purpose of conducting due diligence before loan approval?

• To verify the borrower’s repayment capacity and minimize risk

• To assess the bank’s profitability

• To ensure higher interest rates are charged

• To fulfill regulatory requirements only

A key indicator of financial distress in MSME borrowers is:

• Consistent profit growth

• High inventory turnover

• Delayed receivables and reduced cash flow

• Strong credit rating

Credit monitoring involves tracking which of the following?

• Changes in borrower’s business performance and market conditions

• Stock prices

• Bank’s overall profitability

• National GDP only

What is the primary objective of preventive vigilance in the credit process?

• Identifying and rewarding high-performing employees

• Reducing fraud and ensuring compliance

• Promoting aggressive credit disbursement

• Enhancing customer loyalty

Which financial ratio is most commonly used in assessing MSME creditworthiness?

• Dividend Yield

• Return on Equity (ROE)

• Debt Service Coverage Ratio (DSCR)

• Price-to-Earnings Ratio

A bank’s continuous review of an MSME borrower’s cash flows and operational efficiency is known as:

• Risk Management

• Periodic Audit

• Credit Monitoring

• Regulatory Compliance

• Which of the following is a red flag in credit monitoring of MSME accounts?

• Early loan repayment

• Consistent loan installments

• Frequent overdraft requests

• Reduced production capacity

Which is an effective method of preventive vigilance in MSME credit management?

• Loan restructuring without verification

• Close monitoring of large-value transactions

• Increasing credit limits frequently

• Ignoring negative audit findings

Which of the following should be included in due diligence for MSME borrowers?

• Personal history of the promoter

• Company’s regulatory compliance only

• Stock market data

• National GDP trends

Under the CGTMSE scheme, the maximum collateral-free loan limit for MSMEs has been recently updated to:

• ₹1 Crore

• ₹2 Crores

• 3 Crores

• ₹5 Crores