Q.(a) Explain in detail the granting of different kinds of loans by the commercial banks.

(a) Banks lend by way of term loans, cash credit, overdraft, discounting bills and ordinary loans/advances. (b) Partnership registration is done by filing a signed statement with the Registrar of Firms, who enters the firm in the Register of Firms and issues a Certificate of Registration.

(a) Kinds of loans granted by commercial banks:

1. Term loans — loans given for a fixed period (short, medium or long term) for purposes such as buying machinery or setting up business, repaid in instalments with interest.
2. Cash credit — the bank allows a borrower to draw money up to a sanctioned limit against the security of goods or assets; interest is charged only on the amount actually used.
3. Overdraft — a current-account holder is allowed to withdraw more than the balance in his account up to an agreed limit for a short period; interest is charged on the overdrawn amount.
4. Discounting of bills of exchange — the bank pays the holder of a bill its value (less a discount) before the due date, thus providing immediate cash, and collects the full amount from the debtor on maturity.
5. Loans and advances (including consumer loans) — a fixed sum is lent against security and credited to the borrower's account; interest is charged on the whole amount.

(b) Procedure for registration of a partnership firm:

1. Application to the Registrar — the partners apply to the Registrar of Firms of the area in the prescribed form (statement).
2. Particulars to be furnished — the statement contains the firm's name, principal place of business, other places of business, names and addresses of all partners, and the date each partner joined. …