Module: General Practice
Q48: Which committee recommended the shift from the "Maximum Permissible Bank Finance" (MPBF) method to the "Cash Budget" system for assessing working capital requirements of large borrowers?
✅ Correct Answer: B
The Chore Committee (1979) reviewed the cash credit system and recommended that for large borrowers, banks should move away from the static MPBF formula.
Instead, they should adopt the Cash Budgeting method (via the Quarterly Information System - QIS) to assess needs based on actual cash flows.
The Tandon Committee (1974) had previously introduced the MPBF (Method I and II) concepts based on the gap between assets and liabilities.
Instead, they should adopt the Cash Budgeting method (via the Quarterly Information System - QIS) to assess needs based on actual cash flows.
The Tandon Committee (1974) had previously introduced the MPBF (Method I and II) concepts based on the gap between assets and liabilities.