Credit business, also known as credit assets or loan business, is the most important asset business of commercial banks. Credit is the main means of profit for commercial banks, because it can recover the principal and interest by lending, and make a profit after deducting the cost.

As the loan is beyond the control of the bank, there is a great risk that the principal and interest cannot be recovered on time. Therefore, a strict loan system should be established on the basis of observing the Contract Law and the General Principles of Loans. Its main contents are: establishing loan relationship, loan application, pre-loan investigation, loan approval and issuance, post-loan inspection, loan recovery and extension, credit sanctions and other systems.

Extended data:

Relevant requirements for credit business:

1. The loan object, that is, the customer who applies for a loan from the bank, must comply with the provisions of the General Rules for Loans, the Three Measures and One Guide, the Credit Granting Guide of Commercial Banks, the Law of Commercial Banks, and the basic requirements of this institution for the credit object. Credit institutions generally divide customers into two categories. The first category is corporate customers; The second category is natural person customers.

2. The loan amount refers to the specific credit amount granted to the borrower by credit institutions such as banks. Credit institutions should fully consider the borrower's loan demand, loan purpose, repayment ability, guarantee provided, credit status, etc.

3. The loan term refers to the loan term agreed by the borrower and the borrower in the contract according to relevant regulations. The loan term shall be determined according to the type, nature and purpose of the loan. In the loan contract, the terms of the loan term concluded by the parties must be detailed, specific, comprehensive and clear, so as to ensure the smooth performance of the contract and prevent contract disputes.

4. The loan interest rate is the ratio of the interest amount to the principal in a certain period, which is usually expressed as a percentage. If calculated on an annual basis, it is called the annual interest rate. Interest rate is a certain reward that the currency owner gets from the borrower for temporarily transferring the right to use the currency.

References:

Baidu encyclopedia credit business