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.

Webster Dictionary Meaning

1. Credit
- Reliance on the truth of something said or done; belief; faith; trust; confidence.
- Reputation derived from the confidence of others; esteem; honor; good name; estimation.
- A ground of, or title to, belief or confidence; authority derived from character or reputation.
- That which tends to procure, or add to, reputation or esteem; an honor.
- Influence derived from the good opinion, confidence, or favor of others; interest.
- Trust given or received; expectation of future playment for property transferred, or of fulfillment or promises given; mercantile reputation entitling one to be trusted; -- applied to individuals, corporations, communities, or nations; as, to buy goods on credit.
- The time given for payment for lands or goods sold on trust; as, a long credit or a short credit.
- The side of an account on which are entered all items reckoned as values received from the party or the category named at the head of the account; also, any one, or the sum, of these items; -- the opposite of debit; as, this sum is carried to one's credit, and that to his debit; A has several credits on the books of B.
2. Credit
- To confide in the truth of; to give credence to; to put trust in; to believe.
- To bring honor or repute upon; to do credit to; to raise the estimation of.
- To enter upon the credit side of an account; to give credit for; as, to credit the amount paid; to set to the credit of; as, to credit a man with the interest paid on a bond.
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