CREDIT GOVERNANCE AND COMPLIANCE DECEMBER 2023PAST PAPER

WEDNESDAY: 6 December 2023. Afternoon Paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.

QUESTION ONE

1. Explain the following terms as used in prudential guidelines for lending institutions.

Authorisation. (2 marks)

Compliance function. (2 marks)

2. Examine FOUR guidelines for constituting boards of financial institutions. (8 marks)

3. Discuss FOUR factors that could influence the formulation of a credit policy of a firm. (8 marks)

(Total: 20 marks)

 

QUESTION TWO

1.  Identify FOUR lending disclosure requirements for compliance by cooperative societies. (4 marks)

2.  Explain FOUR types of financial institutions’ regulations. (8 marks)

3. Discuss FOUR criticisms of Basel III accord. (8 marks)

(Total: 20 marks)

 

QUESTION THREE

1.  Differentiate between “agency theory” and “stakeholder theory”. (6 marks)

2. Describe THREE features of unregulated lending institutions. (6 marks)

3. Summarise FOUR principles of economically based ‘Sharia’ Law. (8 marks)

(Total: 20 marks)

 

QUESTION FOUR

1. Differentiate between “collection effective index” (CEI) and “days sales outstanding” (DSO) as measures of collections performance. (4 marks)

2. Examine FOUR areas covered by prudential guidelines of collections performance requirement for
microfinance institutions. (8 marks)

3.  Discuss FOUR broad categories of ethical theory. (8 marks)

(Total: 20 marks)

 

QUESTION FIVE

1.  State SIX functions of consumer protection agencies. (6 marks)

2. Suggest SIX reasons why the central bank may require higher minimum capital ratios to be maintained by a lending institution. (6 marks)

3. Evaluate FOUR activities of directors that may conflict with organisation’s business interests. (8 marks)

(Total: 20 marks)

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