Course 01 Online Assessment

what should the Articles of Association be used to verify? (Select all that apply)

• The purpose of the loan is within the scope of the object of the company.

• The signatories to the credit agreement and any related documents are authorised by the Board to make borrowing decisions and bind the company accordingly.

• The total borrowing of the company is within the authorised borrowing limit.

• The company is permitted to enter into contracts.

which of the following are funded working capital products offered by banks in India? (Select all that apply)

• Packing credit.

• Cash Management facilities.

• Project Finance.

• Overdraft.

which of the following are forms of working capital finance? (Select all that apply)

• Term lending for funding acquisition of plant and machinery

• Performance guarantees

• Short-term loans

• Trade bill discounting facilities

which of the following is not a non-funded facility? (Select all that apply)

• Packing Credit

• Performance Guarantee

• Letter of Credit

• External Commercial Borrowings. (ECBs)

Under Section 185 of the Companies Act, 2013, loans to company directors, a company:

• Can guarantee a loan taken by its 75% subsidiary.

• Cannot give a loan to any director.

• Can give a loan to the Managing Director.

• Can give a loan to its 51% subsidiary.

Why is it important to register a security?

• The company will know who has ownership over its assets.

• The Registrar of Companies is able to maintain a Register.

• Banks must create rights over security offered to be able to enforce ownership on it in the event the loan is not repaid.

• It is part of the Legal Due Diligence of lending in banks.

Which factor has been responsible for reducing the share of total market lending by Indian banks?

• The entry of non-bank financial companies (NBFCs)

• Disintermediation in the Indian financial system

• The ability of banks to support long-term financing

• Emergence of capital markets

Which of the following statements does not apply to a private limited company?

• It can have no share capital and be a private unlimited company.

• It can only have between two and 200 members.

• Its shares are freely transferable and can be traded on the stock exchange.

• It can have no share capital, but be limited by guarantee.

In a facility against assignment of receivables: (Select all that apply)

• The bank advances money to the borrower's debtor who gives it to the borrower.

• The borrower's debtor repays the debt directly to the bank.

• The bank advances the borrower a percentage of the amount owed by the borrower's debtor against security of that debt.

• The borrower repays the debt to the bank whether or not it is repaid by the borrower's debtor.

In the RBI Master Circular on Joint Ventures and Wholly Owned Subsidiaries:

• Banks are permitted to lend to foreign companies having no element of Indian ownership.

• Banks are not permitted to provide buyers' credit to overseas parties to facilitate exports from India.

• Banks are permitted to lend to foreign joint ventures and wholly owned subsidiaries of Indian entrepreneurs.

• Banks are permitted to offer only non-funded facilities to foreign JVs and wholly owned subsidiaries of Indian entrepreneurs.