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GS Paper IUPSC Prelims 2024
Banking & Financial System
Question No. 140Interactive Test Mode
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+2-0.66

Q140. 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?

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?

Select the correct option below (or cross out options to eliminate)
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Official Answer Key & Detailed Solution

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Official UPSC Answer KeyUPSC Prelims 2024 • Indian Economy

Correct Answer: Option (C) — Statement-I is correct, but Statement-II is incorrect.

Concept & Option Breakdown

Standard Reference Verified

Statement-I is correct: Syndicated lending involves a group of lenders (a syndicate) jointly providing funds to a single borrower, which spreads credit risk and limits the default exposure of any individual financial institution. Statement-II is incorrect: Syndicated loans can be structured in diverse formats based on borrower requirements, including term loans (fixed lump-sum amounts), revolving credit facilities (lines of credit), or a combination of both.

Elimination Heuristic & Exam Approach

Absolute limitations in commercial finance such as 'cannot be a credit line' are typically incorrect, as financial syndicates frequently offer flexible credit facilities.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2024 (Q140)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (C) — Statement-I is correct, but Statement-II is incorrect.

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Frequently Asked Questions — UPSC Prelims 2024 Q140

What is the official answer for UPSC Prelims 2024 GS Paper I Question 140 (Indian Economy)?

The official UPSC answer key for this 2024 Indian Economy (Banking & Financial System) question is Option (C): "Statement-I is correct, but Statement-II is incorrect.". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2024 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Banking & Financial System". You can explore all repeated questions from Banking & Financial System in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Banking & Financial System UPSC Prelims question using option elimination?

Absolute limitations in commercial finance such as 'cannot be a credit line' are typically incorrect, as financial syndicates frequently offer flexible credit facilities.

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