BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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is used to rate the borrowers while giving advances.
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is used to work out performance of the employees.
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is used to calculate the number of excellent audit-rated branches.
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is not used in any bank.
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Detailed explanation-1: -A credit rating is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a financial obligation. Credit ratings determine whether a borrower is approved for credit as well as the interest rate at which it will be repaid.
Detailed explanation-2: -It helps determine the probability that you’ll pay back the money that was borrowed, as well as the risk you pose to a lender. Banks typically base the terms of a loan off your credit rating or credit score, therefore, the better your credit rating, the better the terms of your loan.
Detailed explanation-3: -The credit rating provided by these agencies helps in creating a correlation between risk and return of an instrument. Hence, they offer investors a tool to measure the risk of any debt instrument and assess if the returns are worth the risks.