An effective credit appraisal system in digital lending platforms should prioritize sustainable repayment capacity over rapid customer acquisition. The primary systemic risk in automated lending models arises because:

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General Studies · Digital Banking & Risk Management

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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A strategic focus on rapid market share expansion may lead to the neglect of rigorous borrower verification and debt-to-income ratio checks.

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Recommended practice questions in General Studies · Digital Banking & Risk Management

Which of the following territories was annexed by Lord Dalhousie under the pretext of misgovernance, and not directly through the Doctrine of Lapse?

What was the primary stated reason for the Partition of Bengal in 1905 by Lord Curzon?

Answer 1

The use of artificial intelligence makes it impossible for financial institutions to track default rates in real-time.

Answer 2

Digital lending platforms are legally prohibited from charging interest, leading to unavoidable revenue loss.

Answer 3

A strategic focus on rapid market share expansion may lead to the neglect of rigorous borrower verification and debt-to-income ratio checks.

Answer 4

Automated algorithms are inherently biased towards high-income individuals only, limiting market reach.

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