Did you know that not all borrowers are the same? Whether it’s an individual, a business, or a joint entity, banks follow strict guidelines to assess their credibility before offering loans. If you’re preparing for the CCB Certification, understanding the types of borrowers and credit facilities is crucial to acing your exam and excelling in your banking career!
- Types of Borrowers – Who can take a loan & their liabilities
- Types of Credit Facilities – Secured vs. unsecured loans
- Key Banking Considerations – What banks verify before lending
- Legal Aspects & Documentation – Important laws governing borrowers
- Real-World Case Studies – Examples from the banking industry
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Who is this video for?
- Banking professionals preparing for CCB Certification
- Finance enthusiasts who want to deepen their knowledge
- Anyone working in the loan and credit sector
Types of Borrowers in Banking
1️⃣ Individual Borrowers
Most common category, including salaried employees, self-employed professionals, and entrepreneurs.
- Credit score & financial history matter the most
- Income proof & repayment ability are crucial
- Personal assets may be used as collateral
2️⃣ Joint Borrowers
When two or more individuals apply for a loan together, sharing equal liability.
- Husband & wife taking a home loan
- Business partners applying for a business loan
- Family members pooling funds for a property purchase
3️⃣ Hindu Undivided Family (HUF) Borrowers
A unique concept in India where a family business is controlled by the eldest male member (Karta), and all family members are co-parceners.
4️⃣ Proprietorship Firms
A one-person business where the owner is responsible for all financial obligations.
5️⃣ Partnership Firms
Partnership firms involve two or more individuals who agree to share profits and liabilities.
- Requires a partnership deed
- Partners have joint liability
- More credibility than sole proprietorships
6️⃣ Private & Public Limited Companies
These entities have a separate legal identity from their owners, offering limited liability.
- Require board approval for loans
- Governed by corporate regulations
- Highly structured lending process
IIBF CCP | Types of Borrowers & Credit Facilities Explained | PART 1 [FREE EPDF]
Types of Credit Facilities in Banking
1️⃣ Term Loans
Loans provided for a fixed period, repayable in EMIs.
2️⃣ Working Capital Loans
Short-term funding for daily business expenses.
3️⃣ Overdraft Facilities
Allows customers to withdraw more than their account balance.
4️⃣ Letter of Credit
A guarantee from a bank ensuring timely payment for trade transactions.
Conclusion: Key Takeaways
In this session, we covered the different types of borrowers & credit facilities in banking. Understanding these concepts is essential for banking professionals, especially those preparing for CCB Certification.
Action Step: If you found this session useful, leave a comment below with your key takeaway! If you have any questions, drop them in the comments, and we’ll be happy to help.
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