What would you possibly do if you want to buy a house but don’t have the sufficient amount, want to start your own business but don’t have enough capital, you have ran out of money and you have immediate expenses to meet?. The only possible answer in all these cases would be simply taking a loan or availing credit. Credit has been the mainstay of our lives and we need it at some point or other to meet financial emergencies. The importance of credit has been growing in modern times when our expenses are growing at a faster pace than our income. It would be next to impossible to spend our entire life without availing credit and still end up achieving our financial goals like buying a house, a car and disposing financial liabilities.
Banks have played an important role in providing credit and fuelling the nation’s growth. The very purpose of existence of a banking institution is lending. However a bank cannot randomly distribute credit as its very survival depends upon this prudent decision. This presentation on “Credit Management” explains the importance of credit for a banking institution.