Bank Credit


Also found in: Dictionary, Financial.
Related to Bank Credit: investment credit

Bank Credit

 

monetary loans granted by banking institutions.

Under capitalism, bank credit is one of the forms of loan capital. It may be a sum granted for the temporary use of capitalist enterprises and private parties in exchange for a pledge of physical assets as security, although a pledge is not always part of the agreement; it may also take the form of bank purchase of securities. A distinction is made between long-term and short-term bank credit. Non-Soviet bank statistics single out such categories of loans as loans to commercial and industrial companies, loans to agriculture, consumer loans, and loans to stock-brokers and dealers. For example, in the aggregate balance of American banks for June 1970 credit transactions were distributed as follows: the banks’ loans per se accounted for 70 percent of the banks’ total income assets of $424.2 billion, 30 percent being invested in state securities and state and local bonds. Industrial and commercial companies accounted for 37 percent of the total sum of loan indebtedness, farmers for 4 percent, consumers for 21 percent, and real estate for 23 percent. Today, the main share of bank credit is used by large monopolistic enterprises both directly, in the form of loans under very advantageous conditions, and indirectly, through expansion of consumer and mortgage credit, which leads to the more rapid sale of their goods and services.

Under socialism, bank credit is an important instrument for expanded reproduction and for the promotion of the planned circulation of the fixed and working funds of socialist enterprises. The primary form of bank credit in the socialist countries is direct, planned, and designated credit. Loans are issued in observance of the following credit principles: the planned and designated direction of credits; the use of physical assets as securities; the necessity of payment for credit; and repayment at a definite time. Loans are distinguished by time period (long-term and short-term loans), by sectorial structure (loans in industrial enterprises, agriculture, transportation and communications, and trade), and by purpose or designation (loans for commodity and physical assets and seasonal expenditures, loans granted on the basis of en route payment documents, and loans to supplement working capital). On Jan. 1, 1973, the total enterprise indebtedness just of short-term loans of the Gosbank (State Bank) of the USSR was 111.8 billion rubles. More than two-thirds of all loans were given to enterprises in industry and trade; more than three-fourths of all loans were given for commodity and physical assets.

V. M. USOSKIN

References in periodicals archive ?
Nationalised banks continued to maintain their dominant position contributing around half of both the aggregate deposits as well as gross bank credit of all SCBs.
Under other circumstances, bank credit allows those entities borrowing from the banking system to increase their purchases of goods, services and assets without requiring any other entity to simultaneously reduce its purchases.
Assessing the true nature of small business bank credit availability is especially complicated, in part because it seems clear that a substantial share of the decline in the 1990s of total business loans at banks reflects significant balance sheet restructuring by large firms.
The Bank Credit Model combines Financial Implied Ratings - a fundamentally-derived measure of a bank's one year forward standalone financial profile with daily Implied CDS spreads.
7%) of the total bank credit at the commercial banks during the first nine months of 2013.
Dahl, vice president and treasurer of Foothill Capital, stated, "Foothill Capital is pleased to announce the increases to our commercial paper program and bank credit facilities which will be used to fund the continued growth of our asset-based lending business.
The other product is most often another liquid asset account or a bank credit card.
Muscat, Oct 5 (ONA) The total bank credit by sectors at the commercial banks in the Sultanate during the first half of 2013 stood at (RO14,722.
The Syndicate has agreed to provide new bank credit facilities consisting of a U.
I wanted to avoid getting bogged down on a definition of "credit crunch," but with respect to the Eleventh District let me just say that bank credit has contracted every year since 1985, including last year.
the "Company"), had successfully consummated the previously-announced refinancing of its existing bank credit agreement.