A financial institution deploys a dedicated manager to secure a retail loan tie-up with a major automobile Original Equipment Manufacturer (OEM). Which clause in the agreement is most critical to minimize the lender's credit risk?

Question

Banking · Corporate Lending & Risk

Verified Solution4 OptionsUpdated: October 2026👁️1 View

Share:

Correct answer

The provision of first-loss default guarantee (FLDG) or recourse terms in case of early defaults.

Save this question and verified answer as a clean study sheet with live clickable link.

👥

Challenge your peer aspirants on WhatsApp or Telegram to solve this question!

Online Test Series

Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.

Chapter Practice

Want more practice questions on Corporate Lending & Risk?

Solve complete topic-wise tests with detailed solutions on GkGet.

Recommended practice questions in Banking · Corporate Lending & Risk

The Dandi March, also known as the Salt Satyagraha, was led by which influential leader?

Which act formally granted independence to India, marking the end of British rule?

Who was the key figure in establishing the Indian National Congress?

Answer 1

The rate of subvention fee paid by the OEM to the bank.

Answer 2

The provision of first-loss default guarantee (FLDG) or recourse terms in case of early defaults.

Answer 3

The size and geographical distribution of the OEM's dealer network.

Answer 4

The maximum loan tenure allowed for the car models.

Related Practice Questions