Question

What do you mean by 'credit'?

• A. Agreement in which the borrower lends money, goods and services in return for the promise of future payment
• B. Agreement in which the lender lends money without the promise of future payment
• C. Agreement in which the moneylenders lends money to poor borrowers
• D. Agreement in which only banks lends money to borrowers

Answer 1

The correct option is A Agreement in which the borrower lends money, goods and services in return for the promise of future payment

• Credit means agreement between borrower and lender by which borrower lends money, goods and services in return for the promise of future payment.
• If credit not repaid by the borrower then they are termed as defaulters.
• Credit history of the borrowers will be affected.
• In India, RBI supervises the credit of banking system.