Question: Question 2 Omega bank granted Tools Sdn Bhd an overdraft of three months against the following security: Deposit of title deed No.1234, Lot 1188, Mukim

Question 2 Omega bank granted Tools Sdn Bhd an overdraft of

Question 2 Omega bank granted Tools Sdn Bhd an overdraft of three months against the following security: Deposit of title deed No.1234, Lot 1188, Mukim of Alor Gajah, Melaka which has a bungalow erected thereon. Registered owner: Tools Sdn Bhd Encumbrance: Nil Personal guarantees from three directors of Tools Sdn Bhd. Based on the information above, answer the following questions: (a) Explain the appropriate security documentation and THREE (3) precautions that Omega bank must take to secure its lending. (25 marks) (b) Explain the reasons banks prefer a joint and several guarantee instead of a personal guarantee in its lending to corporations. (5 marks) [Total: 30 marks) Question 2 Omega bank granted Tools Sdn Bhd an overdraft of three months against the following security: Deposit of title deed No.1234, Lot 1188, Mukim of Alor Gajah, Melaka which has a bungalow erected thereon. Registered owner: Tools Sdn Bhd Encumbrance: Nil Personal guarantees from three directors of Tools Sdn Bhd. Based on the information above, answer the following questions: (a) Explain the appropriate security documentation and THREE (3) precautions that Omega bank must take to secure its lending. (25 marks) (b) Explain the reasons banks prefer a joint and several guarantee instead of a personal guarantee in its lending to corporations. (5 marks) [Total: 30 marks)

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