Académique Documents
Professionnel Documents
Culture Documents
2. What are the three types of credit cultures and clearly explain each of them?
5. Who does the regulation and why regulation is important while processing of loan
is performed?
-Based on current market prices and it keeps fluctuating with time trend
-It includes everyone from shareholders to current and potential employees and
society as a whole
-Focus on short term earnings, main emphasis on banks annual profit plan, lending
attracted to high risk and high return borrowers.
-Typical outcome is higher profit in good terms; lower profit in bad times
Market share driven culture
-Main emphasis is on loan volume and growth with intent to be the largest bank
Typical outcome-is that loan quality suffers over time; profit is modest because loan
growth comes from below market pricing.
3. 6 C’s of Lending
4. If projects fail, the job created will fail too there won’t be any economic growth. In
a market share driven culture attracting more customers allows one to be a market
leader then the bank will give the depositors money as loans
5. The federal government or state charter the regulations and regulations are
important while processing loans to address concerns over safety and stability of
financial institutions and avoid bank run. It is designed to create market
transparency between banks and individuals for consumer protection.
6. Responsibilities
-Examine applicants financial records and determine how much money they can
borrow, credit and property evaluations for granting loans
-Meet with people applying for loans, approve loans
7. Proper loans mean more profits, job creation, employment, proper investment,
more variety and therefore economic growth. It plays a crucial role in a country’s
development. By sanctioning loans to developing countries and trade, banks provide
them with the necessary aid for improvement. This leads to increase in production,
profits and employment. Loan process help raise the standards of people through
providing loans to buy capital goods, houses and automobiles ensuring the flow of
money in the market thus the economy will grow.