BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Banks are not comfortable in lending to the infrastructure sector. What are the reasons for this?

A	Banks find it difficult to fund infrastructure projects of 15 years and more
B	Infrastructure projects require large scale funding
C	Infrastructure financing becomes a asset liability problem for banks
D	All of the above

Explanation:

Detailed explanation-1: -The banks might not be willing to lend certain borrowers due to the following reasons: (a) Banks require proper documents and collateral as security against loans. Some persons fail to meet these requirements. (b) The borrowers who have not repaid previous loans, the banks might not be willing to lend them further.

Detailed explanation-2: -ANS-Banks might not be willing to lend to small farmers because they don’t have collateral security to deposit in the bank.

Detailed explanation-3: -Internal factors that are predicted to affect bank lending are viewed from the aspects of credit risk, capital capacity, the efficiency of bank operations, and liquidity. These four aspects are each represented by NPL, CAR, OEOI, and LAR as independent variables.

There is 1 question to complete.