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UPSC 2024: Consider the following statements: Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders. Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line. Which one of the following is correct in respect of the above statements?
(a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
(b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
(c)Statement-I is correct, but Statement-II is incorrect
(d)Statement-I is incorrect, but Statement-II is correct
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Not attemptedCorrect Answer: (c) Statement-I is correct, but Statement-II is incorrect
In a syndicated loan several lenders share a single credit, so the exposure to default is distributed among them—Statement I is correct. Such facilities can be structured either as a term loan (fixed lump sum) OR as a revolving credit line; the absolute assertion that they ‘cannot be a credit line’ is wrong, so Statement II is incorrect. Therefore Statement I is correct and Statement II is not. ([superkalam.com](https://superkalam.com/upsc-prelims/previous-year-question-paper/2024/consider-the-following-statements-statementi-syndicated-lending-spreads-the-risk-of-borrower-default-across-multiple-len-eb62542b-7602-413f-b0cf-03b88315ca07?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2024 Indian Economy question?▼
The correct answer is option (c): Statement-I is correct, but Statement-II is incorrect. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Banking & Financial Sector question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2024, GS Paper 1, as Question 52. It falls under Indian Economy > Banking & Financial Sector.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Banking & Financial Sector?▼
UPSC has asked 48 questions from Banking & Financial Sector (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.