Credits Creation in Bank

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Ordinary Loans :

1. Here Bank gives the ordinary loans against the security. 
2. The amount should be repaid with the Interest which is fixed by the Bank.

Cash Loans :

Total amount is given against security but they impose interest on the withdrawal of money

Over Draft :

Here Customers can withdraw more than what they deposited in the Bank.

Discounting Bills of Exchange :

1. Purchasing and discounting of bills of exchange is another short term method of profitable instrument of banks funds. 
2. Bills of exchange can be discounted on rebate before its due date. The rebate or discount is earning of the bank.

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