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    Question

    W hat is the maximum permissible bank finance (MPBF)

    that a bank may lend , a ccording to the Tandon Committee's recommendations ?
    A 100% of the working capital gap (WCG) Correct Answer Incorrect Answer
    B 75% of the working capital gap (WCG) Correct Answer Incorrect Answer
    C 50% of the working capital gap (WCG) Correct Answer Incorrect Answer
    D 25% of the working capital gap (WCG) Correct Answer Incorrect Answer
    E 20% of the working capital gap (WCG) Correct Answer Incorrect Answer

    Solution

    As per the Tandon Committee’s first method, the maximum permissible bank finance (MPBF) that a bank may lend is 75% of the working capital gap (WCG), with the remaining 25% required to be covered by the borrower’s margin  

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