Working Capital Management Question:
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Explain what is fund based lending? What are the various forms in which fund based lending may be made by banks?

Answer:

Fund based lending, where the lending bank commits the physical outflow of funds. The various forms in which fund based lending may be made by banks:

1) Loan

2) Overdraft

3) Cash Credit

4) Bills Purchased/Discounted

5) Working Capital Term Loans

6) Packing Credit

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