There are different types of bank borrowers. They may be classified as individuals, partnership firms, private limited, public limited companies, large corporate, public sector undertakings, multinational companies etc. The financial and non-financial credit facilities required to the above customers are many. We can divide them in to retail borrowers and corporate borrowers. Retail Borrowers: The…
Introduction The concept of credit in India has a rich and ancient history, tracing back nearly 4,000 years. Evidence suggests that loans were prevalent during the Vedic period (circa 2000–1400 BCE), while rudimentary forms of banking existed as early as 500 BCE. Over the centuries, India’s credit landscape has undergone remarkable transformations, evolving from informal…
Introduction Credit plays a pivotal role in contemporary financial systems, serving as a key enabler for individuals and businesses to access funds for a wide range of purposes—from everyday purchases to large-scale investments. It acts as a catalyst for economic activity by supporting both consumption and production. Moreover, a strong credit profile and prudent credit…
A credit can be categorized into several types, with the most common being revolving credit, installment credit, and open credit. Revolving credit, like credit cards, allows for repeated borrowing and repayment up to a limit. Installment credit involves borrowing a fixed amount with a set repayment schedule, such as an auto loan. Open credit, like…
Credit management refers to the structured process of granting, monitoring, and recovering credit extended to customers. It involves evaluating the creditworthiness of potential borrowers, setting appropriate credit limits, and managing receivables to minimize financial risk and maintain optimal cash flow. Sound credit management is essential for sustaining a business’s financial health and nurturing long-term customer…
The principles of lending revolve mainly around the concepts of safety, profitability and liquidity of advance. The criteria for lending get changed or modified from time to time in response to changing the state of the economy. Traditionally commercial banks in India used to provide security oriented finance to trade and industry. Big industrial houses…
The loan and advances made by a bank shall be utilized for the recognized purpose and the fund is effectively recycled. As a business partner, your bank is also a stakeholder in the business performance of his borrower. This is because the investment made by the borrower through the bank finance shall bring income both…
The Reserve Bank of India (RBI) has periodically issued comprehensive guidelines and instructions to banks to promote the flow of credit to Scheduled Castes (SCs) and Scheduled Tribes (STs). In order to facilitate greater participation of SC/ST beneficiaries in availing credit facilities, it is imperative to enhance awareness of various schemes through effective communication strategies…
Overview Valuation refers to the process of determining the fair market value or realizable price of land, buildings, or other real estate assets. Accurate valuation is essential for various banking functions, including lending, asset monitoring, risk assessment, and legal proceedings. It helps ascertain not only the current market value but also the distressed or forced…
IntroductionThe concept of Home Information Packs (HIPs) was once proposed in India to enhance transparency and protect the interests of homebuyers. Although the idea received preliminary attention, particularly from industry bodies such as ASSOCHAM, it did not evolve into a mandated or widely adopted framework. Instead, the real estate sector has shifted focus to alternative…