4

An asset class that consists of the process of lending and borrowing money. A debt is an amount that has to be returned to the lender so there is a liability to give back the money. The cost for using the money is in the form of interest payments.

The risk associated with an investment where the borrower is not able to repay the amount to the lender. This can occur on account of poor financial condition of the borrower, and it represents a risk for the lender.

Deposits that are raised by companies from various investors are called company fixed deposits. They have all the features of a fixed deposit but are raised by a company.

Banks that are operating in the economy under co-operative model of ownership. This is a situation where a number of people get together and form a co-operative and then run the bank jointly.

A person or an entity that takes money from someone else for various purposes. The borrower uses the money for the specified time duration and at the end of the period returns the money to the lender. For the usage of these funds there will be a payment called interest.

Deposits that are collected from investors by banks for a specific time period are known as bank fixed deposits or bank term deposits. These form the main area of raising funds for banks.

A financial entity that accepts deposits from the public and then gives this money as loans and advances to those who require funds. The bank typically earns money from taking deposits at a lower cost and then lending the money at a higher rate.