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priyanka

priyanka (Querist)
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18 January 2010 what is fund base & non fund base?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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18 January 2010 Dear Prinku (as you look in the picture),

The terms asked by you is used in banking.

Fund based limits means funds are involved of the banker who sanctions such limits. For example; cash credit limits.

In non-fund based limits, funds of banker are not involved. The bankers take guarantee only when there is a default in the commitment by the borrower. Examples are Letter of Credit and Deferred Payment Guarantee.

In non-fund based limits; banker is a mediator only between two unknown parties.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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18 January 2010 Agree with Mr.Surendra

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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18 January 2010 Agree with sir

priyanka

priyanka (Querist)
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20 January 2010 thanks so much sir for answering my question........

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