1. If the credit policy manager at a local bank (Affine Bank Berhad) states not to lend to any firm in sectors that generate losses exceeding 2 percent of its capital, and the bank receives a loan application for RM 10 million from Top Glove Corporation Berhad (TOPGLOV), a healthcare industry company. Furthermore, the bank already has outstanding loans totaling RM 50 million to the healthcare industry, specifically to IHH and KPJ, both of which are healthcare companies. The healthcare industry has a loss rate of 10%. Please address the following questions:

a. From a portfolio credit risk control perspective and using the concentration limit model , how much the maximum limit of lending the bank should allocate to this industry as percentage of its capital.

b. Do you think the maximum limit allocated to this industry in terms of dollar value still have a room to accommodate the TOPGLOVE loan application