, principles of sound lending , loans & advances , types of loans & advances , forms of advances or style of credit: , sources of credit information: , factors limiting the level of bank’s advanc

1. Loans & Advances

2. Principles of Sound Lending
•1. Safety
•2. Liquidity
•3. Profitability
•4. The purpose of the loan
•5. Diversification of risks
•National Interest
• Safety
•Margin Money

3. Forms of Advances or Style of Credit:
1. Loan system
2. Cash credit system
3. Overdraft
4. Purchase & discount bill

4. Types of Loans & Advances:
1. On the basis of object or purpose
 Commercial Loan
 Consumers Loan
 Agriculture Loan
2. On the basis of time
 Short term
 Midterm
 Long-term

5. 3. On the basis of Security
 Secured loan
 Unsecured loan
Determining Creditworthiness
Character
Capacity
Capital
Condition
Collateral

6. Sources of Credit Information:
The Borrower
Credit Information Bureau
Bazar Reports
Exchange of Credit Information Among Banks
Personal Interview
Study Account
Audited Financial Statement

7. Factors Limiting The Level of Bank’s Advances:
The Size & maturity Pattern of Deposits
Credit Control by Central Bank
Seasonal Variation of Bank Credit
The Demand for Credit