Bank Lending Practices

Bank lending practices involve how banks evaluate and provide loans to individuals and businesses. Banks assess an applicant’s financial stability, credit history, and ability to repay before approving a loan. They choose loan types, set interest rates, and determine repayment terms based on factors like risk and economic conditions. These practices aim to balance supporting borrowers with managing the bank’s risk. Effective lending encourages economic growth while ensuring the bank’s financial health. Good lending practices are transparent, fair, and follow regulations to protect both the bank and borrowers.