Have you ever wondered who can open a bank account or apply for a loan? 🤔 Or why some people easily get credit while others struggle? Whether you’re preparing for the Certified Credit Professional (CCP) exam or just curious about how banks decide whom to lend money to, this session is for you!
Who Should Watch This?
- ✅ Bankers preparing for the CCP exam
- ✅ Banking aspirants wanting to boost their knowledge
- ✅ Finance professionals looking to understand borrower eligibility
- ✅ Students & entrepreneurs curious about banking & loans
🚀 Hit play on the video below to master these concepts!
👉 Watch the Full Video Here:
Core Functions of a Bank
Banks perform two major functions:
- Accepting Deposits: Savings, Current, FD accounts.
- Lending & Investing: Providing loans, advances, and making investments.
Banks play a crucial role in the economy by acting as intermediaries between depositors and borrowers. They ensure financial stability and liquidity, promoting economic growth and development.
Who Can Open a Bank Account?
Banks allow various types of customers to open accounts, such as:
- Individuals (Single or Joint Accounts)
- Hindu Undivided Families (HUFs) for business purposes
- Trusts & Executors
- Agents & Attorneys (Operating on behalf of others)
- Partnership Firms & Limited Companies
- Clubs & Societies (NGOs, Educational Institutions)
Each of these categories has specific requirements and documentation that must be met to open an account. Proper identification, proof of business (if applicable), and financial records are usually required.
Legal Aspects of Banking Contracts
Before lending money, banks must ensure that the borrower:
- Is legally competent to contract
- Has legal enforceability in case of disputes
- Meets the criteria under The Indian Contract Act
Understanding these legal aspects helps banks mitigate risk and protect both themselves and the borrowers from potential conflicts.
IIBF Certified Credit Professional | Principles of Lending | Chapter 1 [FREE EPDF]
Risk Assessment in Lending
When banks issue loans, they must assess the risk associated with each borrower. This involves evaluating:
- Credit Score: A reflection of the borrower’s past credit behavior.
- Income Stability: Ensuring the borrower has the capacity to repay.
- Collateral: If required, assets are assessed for their value and liquidity.
- Industry Risks: Businesses in high-risk sectors may face stricter loan conditions.
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