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    Question

    A borrower shows DSCR 1.15, Current Ratio 1.20, Security

    Coverage 1.10, good promoter integrity but volatile industry outlook for next 2 years. What is the most appropriate sanction strategy?
    A Reject proposal Correct Answer Incorrect Answer
    B Sanction full limits without conditions Correct Answer Incorrect Answer
    C Sanction reduced limits with covenants Correct Answer Incorrect Answer
    D Defer indefinitely Correct Answer Incorrect Answer
    E Convert to unsecured loan Correct Answer Incorrect Answer

    Solution

    Borderline ratios + industry risk → controlled exposure with safeguards.

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