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    Question

    A lender relies on various sources of information to

    confirm a business’ operational and financial data . Which of the following documents are used by a lender for this purpose ?   A. Bank statements   B. GST returns   C. IT returns  
    A Only A Correct Answer Incorrect Answer
    B A and B Correct Answer Incorrect Answer
    C A and C Correct Answer Incorrect Answer
    D B and C Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    As part of due diligence, a bank/lender must use various internal and external sources to assess the credit profile of a borrower. This would include:  

    • Internal Sources (Existing to the Bank-Past track, personal credit history of promoters)   
    • External Databases (CRILC, CIBIL, ROC, CERSAI , wilful defaulter list, credit fraud registry, etc )   
    • Documents submitted by the client (Annual report/Bank statements/GST /ITR )   
    • Market Feedback   
    • Visit to the borrower ’s residence/office/plant etc. without prior permission and gather information from nearby available sources.   

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