Definition Definition

Credit

Credit means bank’s advance or investment that is made by commercial banks or other financial institutions in order to attain the objective of the banking firm I.e. earn revenue. Credit also means a form of utilization of bank’s liabilities (deposits both time and demand)

  • Credit is granted on the basis of specific terms and conditions.
  • Credit refers different form of investments.
  • Credit is the difference between derivative deposit and primary deposits resulted from the operation process of deposit multiplier.
  • Credit is the difference between derivative deposit and primary deposits resulted from the operation process of deposit multiplier
  • Credit is the source of “earning power” of financial institutions
  • Credit is the distribution of economy’s idle money into desired productive sectors.

Credit is the receiving money, goods, or services on the basis of an agreement between the lender and the borrower that the loan is for a specified period of time with a specified rate of interest.


Credit is the ability to purchase something without immediately paying for it – through a credit card, a bank loan, a mortgage, or other forms of credit. The creation of credit is the most important source of new money, and new spending power, in the economy.


Credit is an entry that records a decrease in an asset, an increase in liability, or an increase in owner’s equity; recorded in the right side of a journal or ledger entry.

Category: Economics
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