Question

What are the chief methods of lending available to the commercial banks?

Answer 1

1. Fixed Loans: Under this method of advancing loan, the bank advances in fixed amount repayable either in fixed monthly or yearly installments or in lump sum. It is usually borrowed to meet with the long term requirements for capital

2. Cash Credit :Another method of advancing loan is cash credit method. By cash credit arrangements, a customer is granted an advance up to a certain limit, which he can draw from time to time required by him.