In case where the loan is sanctioned by the bank against the borrower submitting the fake/forged documents and thus, playing fraud on the bank, such a loan is to be treated in the banks books as a.....asset, even when there is recovery in the account as per the repayment schedule approved by the bank at the time of sanctioning the loan.

BANKING GENERAL KNOWLEDGE

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

In case where the loan is sanctioned by the bank against the borrower submitting the fake/forged documents and thus, playing fraud on the bank, such a loan is to be treated in the bank’s books as a____asset, even when there is recovery in the account as per the repayment schedule approved by the bank at the time of sanctioning the loan.

A	standard
B	sub-standard
C	doubtful
D	loss

Explanation:

Detailed explanation-1: -The cardholder was the one whose information was stolen and used illegally, while the merchant will be the one bearing the cost. In cases of friendly fraud, however, the customer is actually defrauding the merchant.

Detailed explanation-2: -Collateral security is any other security offered for the said credit facility. For example, hypothecation of jewellery, mortgage of house, etc. Example: Land, Plant & Machinery or any other business property in the name of a proprietor or unit, if unencumbered, can be taken as primary security.

Detailed explanation-3: -There are four main types of security: debt securities, equity securities, derivative securities, and hybrid securities, which are a combination of debt and equity.

Detailed explanation-4: -Before a lender issues you a loan, it wants to know that you have the ability to repay it. That’s why many of them require some form of security. This security is called collateral which minimizes the risk for lenders. It helps to ensure that the borrower keeps up with their financial obligation.

There is 1 question to complete.