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.