New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    In which of the following facility the borrower can take

    money out as needed until the limit is reached, and as money is repaid, it can be borrowed again?
    A Loan of Credit Correct Answer Incorrect Answer
    B Line of Credit Correct Answer Incorrect Answer
    C Credit Draft Correct Answer Incorrect Answer
    D Line of Credit Draft Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    • The Line of Credit is not a grant but a ‘soft loan’ provided on concessional interest rates to developing countries, which has to be repaid by the borrowing government. 
    • It is a credit facility extended by a bank or any other financial institution to a government, business or an individual customer, that enables the customer to draw the maximum loan amount.

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