The bank credit is a monetary term that can be defined as the amount of credit available to a third party, individual or business entity from a bank. This can be defined as the aggregate of funds that are available for the individuals or business entities from the banking systems. These are the funds that a banking system is willing to provide individuals or other entities for investment or any other purposes justified by the borrower in front of the banking system.
The availability of the bank credit for individual or business entities depends upon two major things. The first thing is the ability of the borrower to repay the bank credit in the specified time period. The second thing is the availability of the funds in the banking system available to lend the borrowers. The ability of the borrower to repay the bank credit is measured by the financial condition of the borrower and their market repute. Over past few decades the availability of bank credit for the individuals as expanded in a huge way. The credit card is also an example of the bank credit and a single consumer can keep more than one credit cards that may have varying limits. However in 2008 recession also hits the ability of the banks to lend bank credits. Due to recession the credit is although cheap but is relatively difficult to obtain and bank systems prefer to issue credit only to those borrowers that have a clean and strong credit history.
Other Related Accounting Articles: