MONEY AND CREDIT

An asset that the borrower owns (such as land, building, vehicle, livestock, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid.

• Loan

• Collateral

• Credit

Interest rate, collateral and documentation requirement, and the mode of repayment together comprise what is called_______

• Terms of Credit

• Terms of Collateral

• Terms of Documents

Why do lenders ask for collateral while lending?

• For Security

• For Savings

• For distribution

While taking a loan, borrowers look for easy terms of credit. This means __________ (low/high) interest rate,

The _________ supervises the functioning of formal sources of loans.

• Commercial bank

• Private bank

• Reserve Bank of India

The various types of loans can be conveniently grouped as _______ and _____loans

• formal, public

• formal , informal

• public, private