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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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