Banking Term: Trade Credit

Find important banking term that is useful in upcoming banking exam.

Mar 26, 2015 13:54 IST

It is a credit extended by business firms to the other business firms. It may occur explicitly through the issue of bill of exchange or may arise from the delay of receipt and payment for services performed.

It can have an important influence on economic policy, because it in total an important source of finance, comparable, for instance, with bank credit and, at the same time, it does not come under the direct control of the authorities.

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