BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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default of the banker to maintain CRR
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default of the banker to maintain SLR
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default of the banker to release credit to the customer
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default of the customer to repay the loan
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Detailed explanation-1: -Credit risk is the possibility of a loss resulting from a borrower’s failure to repay a loan or meet contractual obligations. Traditionally, it refers to the risk that a lender may not receive the owed principal and interest, which results in an interruption of cash flows and increased costs for collection.
Detailed explanation-2: -Credit risk is defined as the potential loss arising from a bank borrower or counterparty failing to meet its obligations in accordance with the agreed terms.
Detailed explanation-3: -Credit risk is the risk to earnings or capital arising from an obligor’s failure to meet the terms of any contract with the bank or otherwise fail to perform as agreed. Credit risk is found in all activities where success depends on counterparty, issuer, or borrower performance.
Detailed explanation-4: -Different factors are used to quantify credit risk, and three are considered to have the strongest relationship: probability of default, loss given default, and exposure at default.