JAIIB LRAB Unit 9 - Types of Credit Facilities

Types of Credit Facilities

Fund Based Credit Facilities

• Cash Credits / Overdrafts – Cash credit /Overdraft is an arrangement by which a banker allows his customer to borrow money up to a certain limit.
• Term Loans -
• Bill Finance

Non-Fund based Credit Facilities

• Bank Guarantee
• Letter of Credit Facility

Rule in Clayton’s Case
Discharge of debit items by subsequent credits was enunciated in a case called Clayton’s case.