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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 β†’ controlled exposure with safeguards.

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