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    Question

    Which one of the following is not a purpose of "credit monitoring"?

    A Ensuring that the quality of the credit is maintained at the same level as at the time of sanction and there is no slippage. Correct Answer Incorrect Answer
    B Ensuring compliance with terms of sanction/covenants stipulated at the time of sanction. Correct Answer Incorrect Answer
    C Effecting reasonable/sizeable recovery in accounts, already classified as NPA. Correct Answer Incorrect Answer
    D Keeping track of the borrowing company Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    The purpose of credit monitoring is to ensure the end-use of funds and a periodic review of the financial health of a borrower account. Also, it includes continuous measures and reviews to be done to avoid slippage of account to an NPA category. The recovery part or after the account becomes an NPA does not form part of credit monitoring.

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