Loans and Advances Banking business primarily involves accepting deposits from the public and investing or lending the same and thereby making profit out of it. However, lending money is not without risk and therefore banks make loans and advances to farmers, traders, businessmen and industrialist against either tangible (land, building, […]
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Security against Loan
Security against Loan Normally a banker does not lend money without adequate security. Security is meant to be an insurance against the money lended. The different types of securities which may be offered to a banker generally are as follows: (i) Immovable properties (ii) Movable properties (a) Goods (b) Documents […]
Read moreCharges on Securities against loan
Charges on Securities against loan While extending credit, banker must secure his position. A wide range of securities e.g. Land, Building, Goods, Share Certificates, Life Policies, Fixed Deposit Receipts, Title Deeds etc. are accepted by banks as cover for a loan. Not only that the banker should insist on good […]
Read moreSupervision and Control of loans
Supervision and Control of loans Control at Branch Level Branch Managers are expected to exercise commonsense and proper care in handling advances whether sanctioned by them or any other appropriate authority. The managers are responsible to see that all advances are properly constituted; that is to say, they must see […]
Read moreLoan Against Immovable Properties
Loan Against Immovable Properties Banks usually do not prefer to advance money on the security of immovable Properties or real estates, e.g. land and building etc. on account of the following reasons: (i) Difficulty in ascertaining the title to the property: A banker has to spend sufficient time and money […]
Read moreLoan against stock exchange securities
Loan against stock exchange securities The following are the drawbacks of advancing money against stock- exchange securities : (i) Liability to pay in case of partly-up shares. In case partly paid shares have been transferred in the banker’s name and the company makes a call, the banker will have to […]
Read moreLoan against Documents of Title of Goods
Loan against Documents of Title of Goods Documents which in the ordinary course of trade, are regarded as proof of the possession or control of the goods, are called documents of title. They authorize the holder thereof to transfer or receive goods which are mentioned therein. Bill of lading, dock […]
Read moreLoan against Life Insurance Policies
Loan against Life Insurance Policies A life insurance policy is a contract in which one party (the insurer) agrees give a certain sum upon the happening of a certain event contingent upon duration of human life, in consideration of the immediate payment of a smaller sum or certain periodical payments […]
Read moreLoan against FDR
Loan against FDR A fixed deposit is payable after the expiry period. The encashment of a fixed deposit before its maturity results in loss of interest to the depositor.- He may. therefore, borrow money against the fixed deposit receipt to meet some of his urgent needs. A fixed deposit receipt […]
Read moreLoan against Supply Bills
Loan against Supply Bills Loan against Supply Bills: The Government and Semi-government Departments or institutions make their purchases from the market by inviting tenders. The person or contractor who quotes the lowest price, gets the order for supply of the goods or completing the work. Before the goods are finally […]
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