Banking · Retail Lending and Operations
A bank provides an automobile dealer with a captive system to pre-check a customer's credit score before submitting the final loan application. This system primarily aims to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Increase the bank's capital adequacy by reducing risk-weighted assets.
- 2Improve the hit ratio (sanction-to-application ratio) and reduce application processing costs.✓
- 3Reduce the dealer's liability in case of loan default.
- 4Expedite the bank's internal processing time for regulatory reporting.
Correct answer
Improve the hit ratio (sanction-to-application ratio) and reduce application processing costs.
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