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Credit Delivery
What is meant by 'credit delivery' in the context of banking?
Credit delivery refers to the process by which banks disburse sanctioned credit facilities to borrowers in a structured and controlled manner, ensuring funds are used for the intended purpose.
What is a 'Revolving Credit Facility' and how does it benefit borrowers?
A facility where repaid amounts become available again for re-borrowing.
What is the difference between fund-based and non-fund-based credit facilities?
Fund-based facilities involve actual outflow of funds (e.g., term loans, cash credit), whereas non-fund-based facilities like letters of credit and bank guarantees represent contingent liabilities where funds are released only upon invocation.
What is a 'Clean Credit' facility in banking?
Unsecured credit granted based solely on borrower's creditworthiness.
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