Consider the following statements : Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders. Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line. Which one of the following is correct in respect of the above statements?
Explanation
* Statement-I: This statement is correct. Syndicated lending, by definition, involves multiple lenders pooling resources to provide a loan to a single borrower. This inherently distributes the risk of default, as no single lender bears the entire burden if the borrower fails to repay.
* Statement II: This statement is incorrect. Syndicated loans can take various forms, including both fixed-amount term loans (lump sum) and revolving credit facilities (credit lines).
Therefore, the correct option is C: Statement I is correct, but Statement II is incorrect.
_Note: UPSC dropped this question from the final answer key._