Q. 245.0( 1 Vote )

'Banks might not be willing to lend to certain borrowers'. Why is it so? What can be done to solve this issue?

Answer :

Banks take deposits from the customers and lend money to the needy in the form of loans.


1. Banks have to follow certain regulations which are framed by Reserve Bank of India before sanctioning loans.


2. Different types of loans like Housing loan, vehicle loan, personal loan etc., have different procedures.


3. It is the primary responsibility of the banks to scrutinize the credentials of the borrower.


4. Generally, for all kinds of loans, banks will take collateral, which is the security.


5. Also, they check the repaying capacity of the borrower.


6. People who cannot produce collateral cannot be granted the loan.


7. Even, if the previous records show any default in repayment, then also banks cannot offer loans.


These are the reasons for which banks may not be willing to sanction loans to certain borrowers.


However, producing proper security and providing a suitable guarantee for the repayment of loan can be done to solve this issue.


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