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What is Credit Market?

Important banking qna for banking aspirants, which is helpful in banking exam.

Mar 31, 2015 14:16 IST

What is Credit Market?

  • The credit market is dominated by commercial banks
  • They raise deposits from the public and extend credit to industries, small and large, agriculture, small business and to personal segment customers and to personal segment customers and weaker section of society.
  • The credit is by way of mostly working capital and also term loans which are fund based facilities.
  • Non fund based facilities are Letters of Credit (inland and foreign) and guarantees. Foreign exchange transactions are handled by commercial banks and financial institution.
  • Banks generally finance only production and of late, extend a little housing finance and to some extent consumer finance.
  • The RBI is supervising the performance of the banks.