Advertisements
Advertisements
प्रश्न
Why do banks or lenders demand collateral against loans?
Advertisements
उत्तर
Bank ask for collateral while giving a loan because of the following reasons:
If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment. Reduction of exposure in order to do more business with each other when credit limits are under pressure.
The loan is secured against the collateral. In the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or the entire amount originally loaned to the borrower.
APPEARS IN
संबंधित प्रश्न
Why is the supervision of the functioning of formal sources of loans necessary?
"Deposits with the banks are beneficial to the depositors as well as to the nation." Explain the statement
What is the basic idea behind the SHGs for the poor? Explain in your own words.
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
Why might banks be unwilling to lend to small farmers?
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
What are the other sources from which the small farmers can borrow?
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
Explain with an example of how the terms of credit can be unfavourable for the small farmer.
Formal Sources of Credit Does Not Include
In a SHG, most of the decisions regarding savings and loan activities are taken by ______.
How can more employment be created in agriculture sector alone ? Explain any three ways.
Answer the following question.
Explain the importance of 'collateral'.
