Bank Credit

Although banks charge fees for most of the services they provide, the major part of a bank’s profits comes from lending money. There are various ways in which a bank can provide credit for its customers. First, it can provide a lump sum of money in the form of a loan. Second, it can allow a customer to draw cheques when he has insufficient money in his account to meet them. This is done by allowing him an overdraft. Finally, it can make it possible for a customer to buy things without paying cash for them. This is done by the use of credit cards.