A credit agreement is a legally binding agreement that documents the terms of a credit agreement; It is made between a person or party who lends money and a lender. The credit agreement defines all the conditions related to the loan. Credit agreements are concluded for both retail loans and institutional loans. Credit agreements are often necessary before the lender can use the funds made available by the borrower. Answer: 1. People hold money as deposits with banks that pay an interest rate for them. 2. People don`t withdraw their money every day. 3.
Banks therefore hold only 15% of their deposits in cash to pay depositors who might come and withdraw money from the bank on a given day. 4. As on a certain day, only a few of the many depositors come to withdraw cash, the bank is able to get away with this cash. 5. They use a large part of the deposits to lend to those who need money. 6. Banks use deposits to meet the credit needs of citizens. 7. In this way, banks communicate between those who have excess money and those who need money.
Banks charge a higher interest rate on loans than they do on deposits. The difference between the two is the banks` main source of income. A. Keep in reserve so people can withdraw B. Fill in their routine expenses C. Extend credits D. Meet bank renovation Good answer: ( EXTEND LOANS) A. The goods are exchanged for cash. B.
The goods are exchanged for foreign currency. C. Goods are exchanged without using any money. D. Trade in goods will be on credit. Correct answer: (GOODS ARE EXCHANGED WITHOUT USING ANY MONEY.) Answer: The interest rate, the guarantee and documentation obligation and the method of repayment together constitute what are called credit conditions. Credit terms vary greatly from one credit agreement to another. They may vary depending on the type of lender and borrower. An agreement by which the lender provides money, goods or services to the borrower in return for the promise of a future payment is called a credit agreement. As in the case of this agreement, the consideration is paid later by the borrower, usually with interest.
Answer: When the need for an exchange (money) became a necessity, different materials were used as money. At first, Indians used grain and livestock as silver. Before the introduction of coins, a wide variety of objects were used as silver. Subsequently, the use of metal coins – gold, silver, copper coins – reached a phase that lasted until the last century. Answer: People who have extra money deposit it with banks by opening a bank account in their name. Banks accept deposits and also pay an interest rate on deposits. In this way, the money of the banks is safe and earns interest. People also have the option to withdraw the money as needed. Since deposits to bank accounts can be withdrawn upon request, these deposits are called demand deposits. Answer: Transactions with money are: 1) Goods are bought and sold with money.
2) Services are exchanged with money. 3) The goods are also purchased with the promise to pay money later. 4) The money is sometimes paid in advance with the promise of delivery of goods later. Answer: 1. Lenders or agricultural traders charge much higher interest rates on loans. They typically calculate 5 percent per month, while banks calculate about 10 to 15 percent per year. The higher interest rate does little to increase borrowers` income. 2. Peasants who borrow from a merchant are obliged to sell their harvest to him at a low price.
As a result, farmers suffer while traders make a profit by selling grain at higher prices. 3. Higher interest rates mean that the borrower has to pay a large part of his income to repay the interest and principal of the loan. This sometimes results in a debt trap for borrowers. 4. On the other hand, banks and cooperatives charge less interest and do not exploit borrowers. Under these conditions, it is necessary to expand formal sources of credit in India. . . .