New 👉 Ask your RBI Grade B 2025 Preparation Queries Here!!

    Question

    _______________ is a present borrowing limit that can be

    tapped into at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit.
    A Term Loans Correct Answer Incorrect Answer
    B Working capital Loans Correct Answer Incorrect Answer
    C Development Loans Correct Answer Incorrect Answer
    D Line of Credit Correct Answer Incorrect Answer
    E Issue of Credit Correct Answer Incorrect Answer

    Solution

    A line of credit (LOC) is a preset borrowing limit that can be tapped into at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit.

    Practice Next

    Relevant for Exams: