Banking
This query is : Resolved
CA R SEETHARAMAN
(Expert)
02 May 2015
Fund based credits are facilities given by banks where actual bank funds involved are termed as fund based.
These are term loans and cash credit facilities.
The credit facilities given by the banks where actual bank funds are not involved are termed as 'non‑fund based facilities'. These facilities are divided in three broad categories as under:
1 Letters of credit
2 Guarantees
3 Co‑acceptance of‑bills/deferred payment guarantees.
Units for the above facilities are also simultaneously sanctioned by banks while sanctioning other fund based credit limits.
These are term loans and cash credit facilities.
The credit facilities given by the banks where actual bank funds are not involved are termed as 'non‑fund based facilities'. These facilities are divided in three broad categories as under:
1 Letters of credit
2 Guarantees
3 Co‑acceptance of‑bills/deferred payment guarantees.
Units for the above facilities are also simultaneously sanctioned by banks while sanctioning other fund based credit limits.
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