1. Rajiv is the President of AUT Garments Ltd. , the maufacturer of hosiery garments based in Ludhiana.

AUT Garments L
already availing the facility of Rs. 50 Lakhs from the bank. Due to rising demand in the festive season, the company
charge on inventory of Rs 3 lakh. What do you think would be the Loss Given Default(LGD) for the bank in this case? Just
expected to be realised at 95% of its total value)

2. Gabba Ltd. has entered into an agreement with Lilawati bank to avail a facility of Rs. 10 crore to expand the busi
one year, Gabba Ltd. had already withdrawn Rs. 7 crore. Calculate the Exposure At Default(EAD) at this point and justify

3. Suppose JiJa Bank Ltd. has entered into an OTC- Derivative contract with a third party. Justify how will the credit
i.) Bank is Out-of- Money( Both Call and Put Options)
ii.) Bank is In-the-Money (Both Call and Put Options)

4. How is the Credit Conversion Factor( CCF) computed by the bank?

5. At the portfolio level, Janta Bank Ltd. has the following key measures:-
--> Probability of Default- 50%
--> Loss Given Default- Rs. 75 Cr.
--> Loans withdrawn against a sanctioned limit of Rs. 500 crores - Rs. 400 crores
--> Credit Conversion Factor = 80%
Calculate the Expected Loss for the bank.

6. The Probability of Default of XYW bank Ltd. is 60%. So, under the IRB Standard approach, what would be the m

7. Janardhan Bank Ltd. uses key measures such as Probability of Default, Loss Given Default and Exposure at Def
which norm is the bank most likely following?
a. Standardized approach b. IRB Advanced Approach c. IRB Standard Approach

8. Ayush Pharmaceuticals had taken a loan worth Rs. 7.5 Crores. However, due depleting margins and declining sa
think would be necessary to intriduce as a banker to tackle this situation. Also, justify the reason for choosing the sa

9. Give certain situations in which the need for introducing overrides becomes important. Also, ascertain the reason
in Ludhiana. AUT Garments Ltd. has been an old customer of Desh Bank and is
estive season, the company wants to avail a working capital facility of Rs. 5 lakh against a
for the bank in this case? Justify your answer with suitable reasons.( Inventory of a sub-standard quality and is

10 crore to expand the business which can be withdrawn over a period of 2 years. After
EAD) at this point and justify your answer.( Credit Conversion Factor- 80%).

ty. Justify how will the credit risk be depending upon the following situations:-

roach, what would be the minimum capital requirement( expressed as a %age)?

Default and Exposure at Default to come with the minimum capital requirements. So,

B Standard Approach d. None of These Ans- (b)

ng margins and declining sales, it is facing cash crunch. Which financials covenants do you
e reason for choosing the same.

t. Also, ascertain the reasons for doing so.