Question

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HERE IS THE QUESTION...

Q.EXPLAIN THE RESTRICTIVE CLAUSE FOR COMMERCIAL BANK.​

Answer 1

Answer:

Restrictive Debt Covenants on Term Loan Agreement. Debt covenants are certain statements in the agreement of a loan which restrict the borrower from doing certain things. The objective of such covenants is nothing but protecting the interest of the lender who is a bank in case of term loans.

Answer 2

Answer:

Commercial banks are the important source of money supply in the economy. They contribute to money supply by creating credit. They create credit out of their total deposits which are many more times greater than their initial level of deposits. ... Those persons who borrow, use this money for making payments.

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