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      Question

      According to the Tandon Committee's recommendations,

      what is the maximum permissible bank finance (MPBF) that a bank may lend?
      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 25% of the working capital gap (WCG) Correct Answer Incorrect Answer
      D 50% of the working capital gap (WCG) Correct Answer Incorrect Answer
      E 10% 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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