Multiple choice

When more than one bank allows credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is generally known as

  1. participation

  2. consortium

  3. syndication

  4. multiple banking

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In syndication, there is a lead bank or underwriting bank, which gives finance to the organisation. Two or more banks can be an underwriting bank, but leading bank will be only one. But, this is not in the case of consortium, where the borrower has to arrange the finance from different banks.

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