Answer briefly the following questions : What is non-fund based financing of banks?
CS Professional · Banking - Law & Practice · PYQS · June 2022
Answer briefly the following questions : What is non-fund based financing of banks?
Answer & Explanation:
Non-Fund Based Credit Facilities: Non-fund Based facilities are those, which do not involve outflow of bank's funds at the time of sanction. Non-fund-based limits may turn into fund-based facility on due date /occurrence of the specified event like devolvement of bills under LC, invocation of Bank Guarantee, etc. The types of Non-fund based credit facilities are given below: Bank Guarantees Letter of Credit (LC) Factoring Commercial Papers (CP) Bills Purchase and Discount
Topics: Banking Operations
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