Funny Picture Video And Much More Click here To Get Free Tips How Earn Money Online The Role of Credit in bank's earnings Introduction Credit, in commerce and finance, term used to denote transactions involving the transfer of money or other property on promise of repayment, usually at a fixed future date. The transferor thereby becomes a creditor, and the transferee, a debtor; The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.hence credit and debt are simply terms describing the same operation viewed from opposite standpoints. Type of Credit The principal classes of credit are as follows: (1) Mercantile or commercial credit, which merchants extend to one another to finance production and distribution of goods; (2) Investment credit, used by business firms to finance the acquisition of plant and equipment and represented by corporate bonds, long-term notes, and other proofs of indebtedness; (3) Bank credit, consisting of the deposits, loans, and discounts of depository institutions; (4) consumer or personal credit, which comprises advances made to individuals to enable them to meet expenses or to purchase, on a deferred-payment basis, goods or service for personal consumption (see Credit Card); (5) real-estate credit, composed of loans secured by land and buildings; (6) public or government credit, represented by the bond issues of national, state, and municipal governments; and (7) international credit, which is extended to particular governments by other governments, by the nationals of foreign countries, or by international banking institutions, such as the International Bank for Reconstruction and Development. |
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