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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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