Mr. Vikas, a young entrepreneur, approaches 'Axis Bank' for a business loan. His CIBIL score is 620. The bank's internal policy classifies scores below 650 as 'High Risk'. The credit officer, Ms. Priya, advises him that he must improve his score signific antly before they can offer him the loan at a standard rate. The officer explains that his current score makes the bank liable for higher capital allocation. Which of the following is the maximum possible score in the CIBIL range, and what is the implication of his current score on the bank's regulatory Capital Adequacy Requirement?

Question

Accepted Answer

Maximum Score: 900. Implication: The bank will have to assign a higher risk weight to this loan, leading to a higher Capital to Risk-Weighted Assets Ratio (CRAR) requirement for the bank.

Answer

Maximum Score: 920. Implication: The bank must obtain a special guarantee from the RBI for the loan.

Answer

Maximum Score: 900. Implication: The bank is prohibited from lending any amount to Mr. Vikas.

Answer

Maximum Score: 920. Implication: The current score forces the bank to maintain a higher SLR (Statutory Liquidity Ratio).

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