Question

What are the different forms in which banks extend loans?

Answer 1

Banks offer loans and advances to their customers through the following methods:

1. They grant fixed-term loans for a specified duration.
2. They offer cash credit, where a predetermined loan amount is approved, allowing the borrower to withdraw funds as needed.
3. They provide overdraft facilities, enabling customers to withdraw more money than their available account balance, up to the sanctioned overdraft limit.