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Corporate Banking- Vivek Dwivedi

What is one of the main roles of banks?

Mitigating the trust gap between exporters and importers

Helping their clients to hedge their financial risks

Exchanging currencies

Bringing together parties with a surplus of money and parties with a shortage of money

The chance that a producer will not be paid the invoice amount is greatest if the client is

A domestic entity to whom the producer sells goods on a regular basis

A domestic entity to whom the producer sells goods for the first time

A foreign entity to whom the producer sells goods on a regular basis

A foreign entity to whom the producer sells goods for the first time

In what sense will the risk for an exporter increase if an invoice is stated in a foreign currency instead of in his domestic currency?

The risk that the buyer will not be able to pay is greater

The risk that the goods will not arrive in good shape is greater

Except for the chance of non-payment he also runs the risk that the sales proceeds in his domestic currency will decrease

Except for the chance of non-payment he also runs the risk that the contract will not be approved by the foreign authorities

What is monetary policy?

A policy carried out by the central bank to influence the state of the economy by managing interest rates

A policy carried out by the ministry of economic affairs to influence the state of the economy by managing interest rate

A policy carried out by the central bank to influence the exchange rates

A policy carried out by the ministry of economic affairs to influence the exchange rates

Which of the following is NOT required for being granted a banking license?

Have a business plan in place

Have a sufficient amount of capital

Have a administrative and technical infrastructure

Have a minimum number of branches

For which of the following activities do banks need to apply for a separate license in the
Netherlands?
I. Payment Services
II. Leasing
III. Granting guarantees

Only I and II

Only I and III

Only II and III

I, II and III

The requirement to hold sufficient capital is an example of

Prudential regulation

Conduct Regulation

Market Efficiency Regulation

Criminal law

The aim of the deposit guarantee directive is to protect

The depositors of the bank

The borrowers of the bank

The shareholders of the bank

The management of the bank

For which of the following types of risk are banks required to hold regulatory capital?

-Required by basel rules

Credit risk, market risk and operational risk

Credit risk, liquidity risk and operational risk

Market risk, liquidity risk and interest rate risk

Credit risk, interest rate risk and operational risk

A ‘joint supervisory team’ consists of supervisors from

DNB and AFM

DNB and the Ministry of Finance

ECB and AFM

ECB and DNB

In which of the following cases is new money created?

When a central bank buys bonds from a commercial bank.

When a central bank lends money to a commercial bank

When a client of commercial bank withdraws money from an ATM

When a commercial bank gives a loan to a client without first borrowing the money

Which of the following is a type of risk for which Rabobank has not formulated a risk appetite but which is inherent to the operation of the bank?

Credit risk

Liquidity Risk

Interest Rate Risk

Operational Risk

What is liquidity risk?

The risk that a bank does not have enough capital

The risk that a bank does not make enough profit

The risk that a bank does not have enough liquid assets

The risk that a bank does not comply with the regulations

The risk that an organization loses money as a result of the fact that a client cannot fulfil its obligations is referred to as

Legal risk

Regulatory risk

Credit risk

Systemic risk

Which statement about interest rate risk is correct?

The interest rate of the assets is fixed for a longer term than the interest rate for the liabilities, I.e. The risk is that interest rates decrease

The interest rate of the assets is fixed for a longer term than the interest rate for the liabilities, I.e. The risk is that interest rates increase

The interest rate of the assets is fixed for a shorter term than the interest rate for the liabilities, I.e. The risk is that interest rates decrease

The interest rate of the assets is fixed for a shorter term than the interest rate for the liabilities, I.e. The risk is that interest rates increase

A bank has a sufficient solvency if it holds enough

Balances on its reserve account at the central bank

Capital

High quality liquid assets

Foreign exchange reserves

Wat is the aim of funds transfer pricing?

Attributing the net interest income to the commercial business units

Attributing the bank’s available capital to the commercial business units

Attributing the costs of the group functions to the commercial business units

Attributing the revenues of the trading positions of the dealing room to the commercial business units

A 10 year loan is funded by a 3 month deposit. Which rate is used as FTP for this loan?

The 3 month client rate

The 3 month inter-bank rate

The 10 year client rate

The 10 year inter-bank rate

Which of the following subsidiaries is a Wholesale & Rural subsidiary?

Obvion

DLL

BPD

Vista

Which of the following is not a full subsidiary of Rabobank DRB but only a participation?

Freo

Vista

DLL

Achmea

What is the largest contributor to the foreign business of Wholesale and Rural?

South-America

Mid and North America

Australia and New Zealand

Rest of Europe

What is the main source of income for a bank?

Fees from payment services

Fees from investment activities

Net interest income

Gains from trading positions

Which two are the largest items on Rabobank’s balance sheet? a)

�Residential mortgages’ and ‘Deposits from Customers’

�Balances at central banks’ and ‘Deposits from Credit Institutions’

�Deposits from Credit Institutions’ and ‘Residential Mortgages’

�Balances’ at central bank’ and ‘Equity’

What does the item ‘Debt Securities Issued’ in the balance sheet mainly represent?

A short-term investments

A long-term investment

Funding in the form of client deposits

Funding in the form of issuing bonds

As a longer-term ambition, Rabobank is striving at a Cost/Income ratio of

> 14%

> 8%

Mid 50%

Low 60%

Which of the following is NOT an explicitly formulated key performance indicator for Rabobank’s sustainability performance?

Improve the average sustainability performance of its clients

Grow the relative share of sustainable products and services

Reduce CO2 emissions per FTE in its own operations

Maintain a MSCI sustainability rating of A

Which of the following are examples of wholesale clients?
I. Large Corporates
II. Private Equity Organizations
III. Financial Institutions

Only I and II

Only I and III

Only II and III

I, II and III

What are considered to be commercial banking services to wholesale clients?

Financing Products and Arranging Securities Issues

Payments & Transaction Services and Capital Structuring

Investments and Rabo Fund Management

Financing Products and Payments & Transaction Services

For which of the following facilities is the amount not fixed?

Revolving credit facility

Borrowing Base Facility

Overdraft facility

For none of these

Which department of Wholesale Banking assists wholesale clients with the issuance of bonds?

Debt Capital Markets

Acquisition Finance

Rabo Investments

Capital Structuring

Working capital is a means to finance

A machine

Laptops, desks and other inventory

Stock

Means of transportation

The permission to hold a debit balance on a current account is referred to as

Revolving credit facility

Working capital finance

Securitisation

Overdraft facility

The type of working capital finance whereby the bank offers the client the opportunity to take up loans for a total amount of up to a certain percentage of their stock or outstanding receivables is referred to as

Borrowing base finance

Factoring

Securitisation

Supplier Finance

In which cases is Rabobank the legal owner of the financed assets?

Financial Lease and Factoring

Factoring and Securitisation

Borrowing Base Finance and Factoring

Borrowing Base Finance Financial Lease

What is true in regard to value chain finance?

Both, in case of factoring and in case of stock financing the bank becomes the legal owner of the client’s assets

Both in case of factoring and in case of stock financing the bank does not become the legal owner of the client’s assets

Only in case of factoring the bank becomes the legal owner of the client’s assets

Only in case of borrowing base financing the bank becomes the legal owner of the client’s assets

Which of the following types of value chain finance is a loan?

Lease

Supplier finance

Factoring

Securitisation

The credit risk of which type of loans are usually covered by export credit agencies?

(We have a department for this loans )

Export Finance

Project Finance

Structured Finance

Trade and Commodity Finance

What can be true?

The fixed rate for a 10-year loan in euro is based on EURIBOR

The fixed rate for a 10-year loan in euro is based on SOFR

The floating rate for a 10-year loan in euro is based on EURIBOR

The floating rate for a 10-year loan in euro is based on SOFR

What is true in regard to syndicated lending?

A bank does not need the approval of the borrower if it wishes to from a group of lenders

Syndicated lending is only possible for loans and not for credit lines

The reason for a syndicated lending is always the fact that a bank has to comply with a legal requirement

The loan terms are identical for each of the participating lenders

What is the main difference between a club deal and a syndicated loan?

(DRB - Clubs and Syndications only concluded in W&R)

Club deals are only possible for loans and not for credit lines whereas syndications can be used for both

With a club deal, the loan terms are identical for each lender whereas with syndications each lender can lend at his own terms

Club deals usually involve less lenders than syndications

In syndications, agreements are made in regards to cross selling whereas with club deals this is never the case.

Which obligation does a bank accept if it is underwriting a syndicated loan?

To hold a register of all the participating banks

To find participating banks

To also provide the part of the loan for which it was not able to find other lenders

To execute all payments that are related to the loan

What is NOT a role of an agent in a syndication?

Keeping an administration of the lenders

Arranging all the payments related to the loan

Acting as intermediary between sellers and buyers of parts of the loan in the secondary market

Monitoring whether the covenants are met

What is true in regard to Payments and Treasury Services?

All transactions are recorded in Flexcube

All transactions are recorded in Murex

Only Transaction Banking transactions are recorded in Flexcube

Only Treasury Services transactions are recorded in Flexcube

Which statement about the balances on a nostro account is correct? These balances represent

The positions that Rabo holds in a foreign currency

The total positions that Rabo clients hold in a foreign currency

The required regulatory capital in a foreign currency

The net profit that Rabo has realized in a particular foreign currency

Below are two statements about SWIFT.
I. Only banks use the SWIFT network.
II. The most important function of SWIFT is sending messages between members.
What is true?

Only I is true

Only II is true

I and II are true

I and II are false

What is TARGET2?

A RTGS system operated by a commercial company

A RTGS system operated by the ECB

A clearing system operated by a commercial company

A clearing system operated by the ECB

A client of a Rabobank France has sent a payment instruction in USD to the French branch. The ultimate beneficiary is a Mexican company. Whom does the French branch instruct for payment?

Its correspondent bank in Mexico

Its correspondent bank in the US

The Federal Reserve Bank

The central bank in Mexico

What is Rabobank’s correspondent bank for USD?

Citigroup

Bank of New York Mellon

Bank of America

JP Morgan Chase

What is a bulk payment?

A direct debit

A payment instruction for a very large amount

A collective payment instruction that is composed of many individual payment instructions

A payment made by a telephone app

What is the name of a cash pool whereby the balances of all but one account periodically are set at a certain pre-agreed amount?

Balance compensation

Cash concentration with target balancing

Cash concentration with zero balancing

Interest Compensation

What is correct in regard to the conversion of currencies?

A client cannot convert euro into another currency if he only holds a euro account with Rabobank

A client cannot convert euro into another currency if he does not hold any account with Rabobank

A client can only convert euro into another currency by contacting a salesmen on the dealing room

A non-account keeping client can only convert euro into another currency if the account in the other currency is mentioned in the SSI of this client

What is true for an FX Forward?

The rate is set on the maturity date of the contract

The rate of an FX Forward can fluctuate during the contract term

On the moment of the contract, the client knows what exchange rate will be used for the future conversion

A bank will only conclude an FX Forward if it has a clear vision on the future development of the exchange rate

A company has a loan with the interest condition: EURIBOR + 3%. If the company would conclude an interest rate swap in which it pays a fixed rate of 5% and receives EURIBOR, then what are the effective interest costs for this company during the term of the interest rate swap?

(Remember:- Euribor is replaced by fixed rate )

EURIBOR + 2%

EURIBOR + 8%

A company has bought an oil swap with a contract price of 85, a contract size of 12,000 barrels and a term of 12 months (1,000 barrels per month). On a fixing date, the oil price is 80. What is true?

The company can buy 1,000 barrels of oil from the bank at a price of 80.

The company can buy 1,000 barrels of oil in the market at a price of 80 and does not have to pay or receive anything as a result of the oil swap

The company has to pay 5,000 US dollars to the bank

The company will receive 5,000 US dollars from the bank

For which of the following risks related to international trade does Rabobank offer a solution?

Country Risk

Transport Risk

Payment Risk

Sanction Risk

Which of the following is NOT a product to mitigate payment risk in an international trade?

Letter of Credit

Export Finance

Guarantee

Documentary Collection

What is the main obligation that a bank accepts if it is issuing a Letter of Credit? The bank promises to

Provide a loan to the importer

Provide a loan to the exporter

Pay the importer if he hands over the appropriate documents

Pay the exporter if he hands over the appropriate documents

Which of the following are both title instruments?

(Title Instrument means- Documents that prove your the owner )

Bill of lading and insurance certificate

Packing list and insurance certificate

Packing list and Invoice

Invoice and Bill of Lading

A bid bond guarantee is a protection for

The contractor in case the awarding company gives the project to another company

The contractor in case the awarding company is not able to pay the contractor’s invoices

The awarding company in case the chosen contractor is not able to take up the project

The awarding company in case the chosen contractor requires an early payment

Below are three types of documents that are used in international trade.
I. Letter of Credit
II. Accepted bill of exchange
III. Invoice

Which of these documents can be used as a security for a bank loan?

Only I and II

Only I and III

Only II and III

I, II and III

Below are, given in random order, the five alternative ways in which the payment of an
international trade can be arranged.
I. Bank guarantee
II. Payment after delivery
III. Payment in Advance
IV. Documentary Collection
V. Letter of Credit
Put these in the right order from the lowest level of certainty for the exporter to the
highest level of certainty.

I, II, IV, V, III

II, III, I, IV , V

II, IV, V, I, III

III, IV, II, I, V

Below are, given in random order, the five phases in the so-called client journey.
I. Legal Documentation
II. Credit Approval
III. Credit Application
IV. Monitoring
V. Prospecting and Deal Origination
What is the correct order of these phases?

I, III, II, IV and V

IV, II, V, I and III

V, III, II, I and IV

III, II, I , IV and V

Which party is NOT officially involved in the prospecting and deal origination phase?

The client

The client owner

A credit analyst

A credit risk officer

What does RAROC show?

The risk that the bank will take

The ratio between risk and revenues

The profitability of a client

The creditworthiness of the client

Below are six different parties who could be involved in the credit approval process
I. Client Owner
II. Regional Product Head
III. Local Risk Officer 1
IV. Local Risk Officer 2
V. Global Risk Officer
VI. CCCRG
Who have to approve the credit risk for a deal which has been assigned the Lane
Colour Yellow 3?

Only I and III

Only I, II and IV

I, II, III, IV

I, II, III, IV and VI

What right does a cross-default covenant give to the lender?

The right to put the borrower in default if the borrower defaults in another loan

The right to ask for the same type of collateral as the new other lenders

The right to cancel the loan if the borrower is defaulting

The right to cancel the loan if the lender is defaulting

What is the initial consequence of a credit trigger in case of a loan?

There will be an additional review of the client

The client is immediately sent to FR&R

The loan will be cancelled

There is no immediate consequence, this will be checked at the next planned review

What is the responsibility of the recovery team of FR&R?

Make up a plan to enlarge the likelihood for full repayment

Minimize the loss for Rabobank

Transfer the loan to an external debt collection agency

Perform the annual credit revision on loans

Which of the following is NOT a functionality of Flexcube?

Syndications

Lease

Trade Finance

Accounts and Payments

The ELCM module is the part of Flexcube where

All the loan details are registered

A part of the credit line is blocked in case of a loan

The payment instructions related to the loan are made

The credit risk approval takes place

Which of the following is operated outside Rabobank?

People Soft

SWIFT

Global Financial System

GCDS

Which systems are used in case of a payment of a loan amount to a client who holds his account in the Utrecht branch ?

Loan module and CNA

Loan module and SAA

A&P and SAA

ELCM and A&P

Which systems and/or modules are used in case of a payment of the loan amount to a non-account keeping client that is serviced through the Singapore Branch?

Only the loan module and CNA

Only the loan module and A&P

The loan module, CNA and SAA

The loan module, A&P and SAA

Where does the (liquidation-)check take place whether a non-account keeping client dealing from Canada has paid an interest amount?

At the Global Nostro Administration

In the A&P module by matching a credit on a settlement account with an incoming payment advice from the loan module

In the A&P module by matching a credit on a the client’s current account with an incoming payment advice from the loan module

In the A&P module by matching a credit on Rabobank’s nostro account with an incoming payment advice from the loan module

Below are three systems that are used by Rabobank
I. Flexcube
II. Murex
III. ELCM
Which systems are used in case of the funding of a loan?

Only I and II

Only I and III

Only II and III

I, II and III

For which types of payment can a settlement account be used?

Only for outgoing payments to third parties initiated by a client

Only for incoming payments initiated by a client in favour of Rabobank

Both, for outgoing payments to third parties and for incoming payments in favour of Rabobank initiated by a client

Only for payments from an internal Rabo account to another internal Rabo account

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