Banks ask for the securities from the borrowers when providing the loans, are known as

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Modes of repayment

Terms of credit

Interest on loans

Deposit criteria

answer is B.

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Detailed Solution

Banks ask for securities from the borrowers when providing the loans, known as Terms of Credit. Formal sector loans are registered by the government, which follows the rules and regulations. Its primary objective is social welfare. The RBI regulates it. It usually charges low-interest rates—for example, Banks and cooperatives. Before providing loans, Banks ask for the collateral and proper documentation as the guarantee by the borrower to repay the loan amount on time. The value of the collateral should be equal to or more than the value of the loan amount that he is willing to borrow. If he fails to repay the loan on time, the bank first warns the borrower or sends a notice to them. Again, if they cannot repay the loan, then the bank has the right to sell the collateral and cover the loan amount.

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