{"id":26021,"date":"2013-05-18T10:25:38","date_gmt":"2013-05-18T04:55:38","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=26021"},"modified":"2024-04-12T14:18:30","modified_gmt":"2024-04-12T08:48:30","slug":"loans-and-advances-2","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/","title":{"rendered":"Loans and Advances"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><a ref=\"magnificPopup\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png\"><img loading=\"lazy\" decoding=\"async\" width=\"750\" height=\"400\" src=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png\" alt=\"Loans and Advances\" class=\"wp-image-99368\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png 750w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1-300x160.png 300w\" sizes=\"auto, (max-width: 750px) 100vw, 750px\" \/><\/a><\/figure><\/div>\n\n\n<p>\u00a0<\/p>\n<p><strong>Loans and Advances<\/strong>&#8211; Banks extend credit to different categories of borrowers for a wide variety of purposes. Bank credit is provided to households, retail traders, small and medium enterprises (SMEs), corporate, Government undertakings, etc. in the economy.<\/p>\n<p><b>Principles of Lending<\/b><\/p>\n<ul>\n<li><b style=\"line-height: 1.714285714; font-size: 1rem;\">Safety:<\/b><span style=\"line-height: 1.714285714; font-size: 1rem;\"> The repayment of loans depends on the borrowers&#8217; capacity to pay. Hence, the banker has to be satisfied before lending that the business for which money is sought is a sound one. Bankers may insist on security against the loan on which they fall back on if repayment does not happen. The security must be adequate, readily marketable.<\/span><\/li>\n<\/ul>\n<ul>\n<li><b style=\"line-height: 1.714285714; font-size: 1rem;\">Liquidity:<\/b><span style=\"line-height: 1.714285714; font-size: 1rem;\"> To maintain liquidity, banks have to ensure that money lent out by them is not locked up for long time. Hence, they design a loan maturity period. If loans become excessively illiquid, it may not be possible for bankers to meet their obligations toward depositors.<\/span><\/li>\n<\/ul>\n<ul>\n<li><b style=\"line-height: 1.714285714; font-size: 1rem;\">Profitability:<\/b><span style=\"line-height: 1.714285714; font-size: 1rem;\"> To remain in business, a bank earns profit on its investment through appropriate fixing of interest rates on both advances and deposits.<\/span><\/li>\n<\/ul>\n<ul>\n<li><b style=\"line-height: 1.714285714; font-size: 1rem;\">Risk diversification:<\/b><span style=\"line-height: 1.714285714; font-size: 1rem;\"> To mitigate risk, banks should lend to a diversified customer base. This diversification is done with regard to of geographic location, nature of the business, etc.\u00a0<\/span><\/li>\n<\/ul>\n<div class=\"apply\">\n<p><span style=\"font-weight: 400;\">Become Vskills <\/span><span style=\"font-weight: 400;\">Certified Commercial Banker<\/span><b>.<\/b><span style=\"font-weight: 400;\"> Learn the module &#8220;Loans and Advances&#8221;. Try the free practice test!<\/span><\/p>\n<h5>Apply for Commercial Banker Certification Now!!<\/h5>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/Certified-Commercial-Banker\">http:\/\/www.vskills.in\/certification\/Certified-Commercial-Banker<\/a><\/p>\n<\/div>\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.vskills.in\/practice\/commercial-banking\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"961\" height=\"150\" src=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Try-Free-Practice-Test-for-CyberOps-Associate-200-201-CBROPS-2-1-1.png\" alt=\"\" class=\"wp-image-99313\" srcset=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Try-Free-Practice-Test-for-CyberOps-Associate-200-201-CBROPS-2-1-1.png 961w, https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Try-Free-Practice-Test-for-CyberOps-Associate-200-201-CBROPS-2-1-1-300x47.png 300w\" sizes=\"auto, (max-width: 961px) 100vw, 961px\" \/><\/a><\/figure><\/div>\n\n\n\n<p><a href=\"https:\/\/www.vskills.in\/certification\/tutorial\/certified-commercial-banker-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">Go back to Tutorial<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 Loans and Advances&#8211; Banks extend credit to different categories of borrowers for a wide variety of purposes. Bank credit is provided to households, retail traders, small and medium enterprises (SMEs), corporate, Government undertakings, etc. in the economy. Principles of Lending Safety: The repayment of loans depends on the borrowers&#8217; capacity to pay. Hence, the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[3342],"tags":[9763,9766,9764,9765,9767,3387,4624],"class_list":["post-26021","page","type-page","status-publish","hentry","category-commercial-banking","tag-certified-commercial-banker","tag-certified-commercial-banker-course-outline","tag-certified-commercial-banker-exam-details","tag-certified-commercial-banker-free-practice-test","tag-certified-commercial-banker-tutorial","tag-loans-and-advances","tag-principles-of-lending"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Loans and Advances - Tutorial<\/title>\n<meta name=\"description\" content=\"Loans and Advances. Government of India Certification for a commercial banker. Get Certified and improve employability. Recognized by...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Loans and Advances - Tutorial\" \/>\n<meta property=\"og:description\" content=\"Loans and Advances. Government of India Certification for a commercial banker. Get Certified and improve employability. Recognized by...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/\" \/>\n<meta property=\"og:site_name\" content=\"Tutorial\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\/\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-12T08:48:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/\",\"name\":\"Loans and Advances - Tutorial\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png\",\"datePublished\":\"2013-05-18T04:55:38+00:00\",\"dateModified\":\"2024-04-12T08:48:30+00:00\",\"description\":\"Loans and Advances. Government of India Certification for a commercial banker. Get Certified and improve employability. Recognized by...\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#primaryimage\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png\",\"width\":750,\"height\":400},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Loans and Advances\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\",\"name\":\"Tutorial\",\"description\":\"Vskills - A initiative in elearning and certification\",\"publisher\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.vskills.in\/certification\/tutorial\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#organization\",\"name\":\"Vskills\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2017\/07\/vskills-min-logo.jpg\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2017\/07\/vskills-min-logo.jpg\",\"width\":73,\"height\":55,\"caption\":\"Vskills\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/vskills.in\/\",\"https:\/\/x.com\/vskills_in\",\"https:\/\/www.linkedin.com\/company-beta\/1371554\/\",\"https:\/\/www.youtube.com\/channel\/UCMWnscxPwRF_PqXo9B7q_Tw\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Loans and Advances - Tutorial","description":"Loans and Advances. Government of India Certification for a commercial banker. Get Certified and improve employability. Recognized by...","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/","og_locale":"en_US","og_type":"article","og_title":"Loans and Advances - Tutorial","og_description":"Loans and Advances. Government of India Certification for a commercial banker. Get Certified and improve employability. Recognized by...","og_url":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/","og_site_name":"Tutorial","article_publisher":"https:\/\/www.facebook.com\/vskills.in\/","article_modified_time":"2024-04-12T08:48:30+00:00","og_image":[{"url":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png","type":"","width":"","height":""}],"twitter_misc":{"Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/","url":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/","name":"Loans and Advances - Tutorial","isPartOf":{"@id":"https:\/\/www.vskills.in\/certification\/tutorial\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#primaryimage"},"image":{"@id":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#primaryimage"},"thumbnailUrl":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png","datePublished":"2013-05-18T04:55:38+00:00","dateModified":"2024-04-12T08:48:30+00:00","description":"Loans and Advances. Government of India Certification for a commercial banker. Get Certified and improve employability. Recognized by...","breadcrumb":{"@id":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#primaryimage","url":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png","contentUrl":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2021\/01\/Loans-and-Advances-1.png","width":750,"height":400},{"@type":"BreadcrumbList","@id":"https:\/\/www.vskills.in\/certification\/tutorial\/loans-and-advances-2\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.vskills.in\/certification\/tutorial\/"},{"@type":"ListItem","position":2,"name":"Loans and Advances"}]},{"@type":"WebSite","@id":"https:\/\/www.vskills.in\/certification\/tutorial\/#website","url":"https:\/\/www.vskills.in\/certification\/tutorial\/","name":"Tutorial","description":"Vskills - A initiative in elearning and certification","publisher":{"@id":"https:\/\/www.vskills.in\/certification\/tutorial\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.vskills.in\/certification\/tutorial\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.vskills.in\/certification\/tutorial\/#organization","name":"Vskills","url":"https:\/\/www.vskills.in\/certification\/tutorial\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.vskills.in\/certification\/tutorial\/#\/schema\/logo\/image\/","url":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2017\/07\/vskills-min-logo.jpg","contentUrl":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-content\/uploads\/2017\/07\/vskills-min-logo.jpg","width":73,"height":55,"caption":"Vskills"},"image":{"@id":"https:\/\/www.vskills.in\/certification\/tutorial\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/vskills.in\/","https:\/\/x.com\/vskills_in","https:\/\/www.linkedin.com\/company-beta\/1371554\/","https:\/\/www.youtube.com\/channel\/UCMWnscxPwRF_PqXo9B7q_Tw"]}]}},"_links":{"self":[{"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/pages\/26021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/comments?post=26021"}],"version-history":[{"count":8,"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/pages\/26021\/revisions"}],"predecessor-version":[{"id":99370,"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/pages\/26021\/revisions\/99370"}],"wp:attachment":[{"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/media?parent=26021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/categories?post=26021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/tutorial\/wp-json\/wp\/v2\/tags?post=26021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}