📝 One-liners · 65 cards
Principles of Lending, Different Types of Borrowers and Types of Credit Facilities
What does the principle of 'Safety' mean in bank lending?
Safety means the banker must have reasonable assurance that the funds lent will be repaid along with interest as agreed.
What is the formula for working capital requirement under the Nayak Committee (turnover) method?
25% of the projected annual turnover
Why is 'Liquidity' considered a cardinal principle of bank lending?
Liquidity ensures the bank can recover funds on demand or within a short notice period, since banks primarily lend depositors' money that may be recalled at any time.
Under the Nayak Committee method, what percentage of projected annual turnover is the bank's permissible finance?
20% of projected annual turnover
🔒
Unlock 65 revision one-liners
Interactive flashcard deck — flip every card to drill questions and answers, mark the ones you got wrong, and revise smarter for Principles of Lending, Different Types of Borrowers and Types of Credit Facilities.
🪙
Unlock cost
300 coins
30-day access · re-unlocks free for 30 days