INSTITUTE OF BANKING AND FINANCE

Bahauddin Zakariya University, Multan

Program MBA (B&F)- Morning/ Afternoon Session/ Semester 2017-20/ 6th
MBA (MFS)- Afternoon
Exam Final Term Time Allowed 2H30M (150Min) (11 am to
01:30 pm)
Course CREDIT MANAGEMENT Course Instructor Omair Majeed
INSTRUCTIONS: Answer all the questions on the answer sheet.
You are advised to write legible handwriting and avoid frequent Cutting and/or Overwriting.
Note:
i) Please attempt your paper on loose sheet/white paper. Hand written paper will be accepted only. After
attempt, you are advised to scan (or take picture) and submit via WhatsApp (PDF/ Word format) and email it
to omairbuchaibf@gmail.com and also email at examibfbzu@gmail.com within specific time. Same files
properly named as per your roll number and name have to forwarded to whats app on 03036666272 and
0306-7490892 Any delay in submission will NOT be entertained. (After 01:50 pm)
ii) The student must write his/her Name, Roll number and date and put signature on each page of answer
sheet
iii) Properly mark page numbers of your answer sheet accordingly
iv) Be concise to the point.
v) The question paper consists of 2 pages

Q1: M/S Ali Ginning Industry is a proprietorship concern. They have been banking with your
Bank/Branch since 2018. Their overall credit history has been satisfactory with minor overdue
payments (no provisioning). They have been availing Running Finance limit of Rs 20.00M
secured against Pledge of cotton bales and mortgage of factory premises. The total value of the
property is 18.0 Million (property valuation done in 2018) and the pledged stocks value varies.
They have recently requested for enhancement of the RF facility from 20.00 million to
25.00Million (5.0Million). What will your decision be regarding this facility and what specific
covenants would you like to add to the said facility. Justify your answer with valid reasoning
(10 marks)

Q2: Briefly discuss various support mechanisms/schemes introduced by SBP to safeguard the
businesses from major shocks due to Covid 19 situation. Also discuss their impact on the overall
economic performance of the country
(10
marks)

Q3: Credit facility request form is the initial document submitted by the customer for availing
financing facilities. What sort of information should this facility form seek and why? What can
be the various sections of a well-defined credit facility request form

1
 (08
marks)

Q4: Following 3 customers visit your branch to avail credit finance facilities:

a) A restaurant owner with a reasonable enough online delivery mechanism

b) A medical equipment manufacturer with a less than satisfactory market repute
c) An edible oil manufacturer

You have the choice to give loan to any 2 of the above. Select the customers that appear
appropriate to you. Validate your answer with logical reasonings

(08 marks)

Q5) Hypothecation of stocks or Pledge of stocks. Why would you select one over the other when
finalizing security structure of your customers credit facility? What can be the pros and cons of
both (06)

Q6: What sort of documentation should be required from following customers (before and
after approval) for processing their credit facility request

a) A home loan request (purchase of built house)

b) A car finance request (purchase of locally manufactured new vehicle)
c) A working capital loan for a feed mill, secured against pledge of stocks, mortgage of
property and pari passu charge on machinery

(08 marks)