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 type of borrowers in retail segments may be identified as individuals, retail traders, Micro, Small and Medium enterprises (MSMEs), Self-help groups, farmers, agricultural borrowers etc. The individual borrow from banks for the purpose of financial assistance in buying homes, vehicles, consumer items etc. Banks are issuing credit cards to their customers as well as to general public. The credit cards are issued in the form of a revolving line of credit. That is the card holder will be allowed to operate the card to the extent of full credit limit sanctioned to him/her on clearing the previous bill outstanding. Besides above facilities banks extend credit facilities to individuals under Education Loan, Personal loan, consumer loan schemes of the banks. The Retail traders and SHGs enjoy working capital facilities from banks; MSMEs get financial assistance from banks both for working capital and Purchase of machinery and equipment for their business usage. Farmers avail crop loans, tractor loans, loans for allied activities etc.
Corporate Borrowers:
All public sector banks as well as major private sector banks, foreign banks in India offer credit facility to corporate customers such as trading houses, multinational companies, exceptionally large domestic industrial and business houses, prime public sector companies etc. Fund Based and non- fund based services extended to corporate borrowers are term lending, short term finance, working capital finance, bill discounting, export credit, Bank Guarantee, Letter of credit, collection of bills and documents etc. Besides, banks extend financial assistance like Channel Financing, vendor financing, Syndication etc. Channel financing is a form of extending working capital finance to dealers having business relationships with large companies. Vendor finance is a form of lending in which a company lends money to be used by the borrower to buy the vendor’s products or property. Syndication allows banks to pool their resources and share risks with other banks while handling a large transactions viz. Project Finance, Corporate Term Loans, Working Capital Loans, Acquisition Finance, etc.
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