Beruflich Dokumente
Kultur Dokumente
Module 5
In this Module
• Types of loans
• Overdraft facilities
• Discounting of bills
• Financing book debts and supply bills
• Charging of Security bills
• Pledge
• Mortgage
Principles of Sound Lending- G & N Pg 166
1. Safety
2. Liquidity
3. Profitability
4. Security
5. Purpose of loan
6. Sources of repayment
7. Diversification of risks
8. Recent concept of sound lending
Newsfeed
• Banks are penalised- Indiscriminate
lending
• AQR- by RBI
• Recapitalisation bonds- bonds issued by
the Union government to which PSBs can
subscribe
Types of Loans
• Loans and advances:-
1. Secured advances- based on tangible assets
2. Unsecured advances/ Clean advances/ Personal advances-
based on personal security of borrower
Secured advances
a. Primary Security
b. Collateral Security
The five C's of credit are:-
FEATURES:-
a. Applicable- items of retail stores
b. Undertaking- to settle on future date
c. Seller keeps selected items separately
d. Initial cash payment- is free of any interest payment by
the seller
e. On full payment- goods are handed over to the buyer
f. Banks do not lend- credit risk angle
g. Provisions of ‘agreement for sale’ is applicable
Questions
1. What are the various types of loans?
2. What are the principles of sound lending?
3. Explain the reasons for overdraft.
4. Explain the various types of loans
5. Explain the characteristics of mortgage. What are the rights of Mortgagee
and Mortgagor.
6. Explain in detail the modes of charging security.
7. What do you mean by Assignment? What are the types of Assignment?
8. Explain the different forms of Advances given by banks.
9. What do you mean by Hypothecation? What are the characteristics?
10. What do you mean by Pledge? Explain the advantages of Pledge and
rights & duties of a Pledgee.
11. What do you mean by Mortgage? Explain in detail the different types of
Mortgages.
12. What do you mean by Layaway sale?