Suppose you are working with an Indian commercial Bank, which has sanctioned a portfolio loan of

$100$ accounts with an average sanction limit of Rs$.1,000,00/-$ to an NBFC$.$ Based on history on an

average $60\mathrm{.}00\%$ of the loans amount remain outstanding on the book of the bank. The bank's internal

rating analysis has estimated a probability of portfolio default equivalent to $1\mathrm{.}5\%$ over the next year and

a loss rate of $35\%$ if the portfolio defaults. You have to calculate Bank's expected loss if the bank is

approving the above portfolio loan.