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Banking > Advanced Banking > Loans

Lending money to the public

Lending money is one of the two major activities of any Bank. In a way, the Bank acts as an intermediary between the people who have the money to lend and those who have the need for money to carry out business transactions.

This activity places its own requirements on the resources of the Bank. For effective functioning of this, a bank must possess:

  • Sufficient deposits.

  • Skills to appraise the potential borrowers and the activity.

  • Legal skills for documentation.

  • Legal skills for recovery of its dues through the courts.

  • Skills to follow up and monitor the end-use of money lent by it.

  • An effective credit delivery system.

  • Review of credit portfolio.

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