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    Question

    The 'Lead Bank' in a consortium lending arrangement is

    responsible for:
    A Providing the entire loan amount Correct Answer Incorrect Answer
    B Coordinating with the borrower and other banks Correct Answer Incorrect Answer
    C Bearing the entire risk of default Correct Answer Incorrect Answer
    D Setting the interest rate unilaterally Correct Answer Incorrect Answer
    E Auditing the borrower's accounts Correct Answer Incorrect Answer

    Solution

    In consortium lending, where multiple banks lend to a single borrower, one bank is appointed as the "Lead Bank" or "Facility Agent." Its primary role is to act as a single point of contact, coordinating all activities between the borrower and the other member banks, including disbursements, collections, and monitoring.

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