Module: | MODULE A: INTERNATIONAL BANKING
Q119: Consider the following statements concerning the Gold Card Scheme for Exporters:
1. Eligible exporters receive an in-principle credit limit that is sanctioned for a period of 3 years, featuring a provision for automatic renewal subject to a satisfactory performance record.
2. Banks are legally mandated to process all fresh credit applications under the Gold Card Scheme within a maximum timeframe of 45 days.
3. A standby limit equivalent to 20 percent of the assessed credit limit is made available to Gold Card holders specifically to facilitate urgent funding needs for executing sudden overseas orders.
Which of the above statements is or are INCORRECT?
2. Banks are legally mandated to process all fresh credit applications under the Gold Card Scheme within a maximum timeframe of 45 days.
3. A standby limit equivalent to 20 percent of the assessed credit limit is made available to Gold Card holders specifically to facilitate urgent funding needs for executing sudden overseas orders.
Which of the above statements is or are INCORRECT?
✅ Correct Answer: B
🎯 Quick Answer:
Statement 2 is the only incorrect statement.Businesses that maintain standard, default-free accounts for 3 consecutive years are rewarded with superior credit terms and highly accelerated loan processing times.
Structural Breakdown: The overall credit limits are sanctioned for a comfortable 3 year block.
To ensure extreme operational agility, a 20 percent standby financial buffer is reserved for unexpected, high-priority orders.
The bank is strictly required to process fresh applications within 25 days, renewals within 15 days, and temporary ad-hoc limits within just 7 days.
Historical Context: This premium scheme was developed to reduce the heavy dependency on physical collaterals and prioritize foreign currency packing credit, significantly bolstering the global competitiveness of domestic small and medium enterprises.
Causal Reasoning: Statement 2 is incorrect because the entire scheme is fundamentally built on the promise of rapid turnaround.
Allowing a 45 day processing window would completely defeat the purpose of the premium program.
The strict regulatory mandate for processing fresh applications is capped at 25 days.