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Explain bank credit. |
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Answer» Bank credit refers to credit, financial accommodation or advance taken from commercial banks. Bank credit is, generally, given for a period not exceeding one year. Bank credit is common to all types of business. The amount of bank credit depends upon the nature and size of the business, and the credit-standing of the concern. Bank credit may be unsecured or against guarantee or against hypothecation, pledge or mortgage of assets. An interest of 15% to 18% is, usually, charged on bank credit. |
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