Banking · Credit Facilities

Statement 1: In a Consortium Lending arrangement, several banks join together to provide a large credit limit to a single borrower where one bank acts as the Lead Bank to conduct the appraisal and coordinate the documentation process while other banks share the risk and the interest income proportionally. Statement 2: According to the guidelines on loan delivery systems, for borrowers with aggregate working capital limits of 150 crore rupees and above from the banking system, the Loan Component should generally be 80 percent while the Cash Credit Component is restricted to 20 percent to ensure better discipline in fund usage. Statement 3: A Term Loan is primarily utilized for the acquisition of fixed assets such as plant and machinery or land and buildings and is characterized by a specific repayment schedule consisting of installments that include both principal and interest, often with an initial moratorium period. Statement 4: A Bill Purchase or Bill Discounting facility allows a seller to receive immediate funds from a bank by selling their trade receivables at a discount, whereas in a Bill Purchase, the bank buys the clean bill and in Bill Discounting, the bank discounts the usance bill. Which of the following options correctly identifies the false statement or its regulatory correction?