Download App

Unit 4 Ch 2 : Sectors of the Indian Economy — Social Studies STD 10 — Question

CBSE BoardEnglish MediumSTD 10Social StudiesUnit 4 Ch 2 : Sectors of the Indian Economy3 Marks
Question
Why do lenders ask for collateral while lending? Explain.
OR
Why do banks or lenders demand collateral against loans?
✓

Answer

The following are the three reasons why the lenders demand collateral while loaning:
  1. It functions as evidence or guarantees that a loan has been received by the borrower from the lender.
  2. It helps the lender to get back his money with interest.
  3. In case of the insolvency of the repayment of the credit the lender can exercise it as compensation.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "SHORT ANSWER QUESTIONS(3 Mark)" from Unit 4 Ch 2 : Sectors of the Indian Economy→Unit 4 Ch 2 : Sectors of the Indian Economy — all question types→Social Studies STD 10 question papers→CBSE Board STD 10 question papers→CBSE Board question paper generator→

Similar questions

What are the reasons for land degradation? Describe briefly any four measures to conserve land from degradation.
→
How we save the stock of fresh water from being polluted? Suggest some ways.
→
For which list, both the central and state Government can make laws?
→
How are local government bodies organised in urban areas?
→
Explain with examples how do some countries face foundational challenge of democracy.
→
Mention any three characteristics of plantation agriculture.
→
‘‘Conflicting goals can be developmental goals”. Elaborate with examples.
→
Why has the ‘Chhotanagpur Plateau Region’ the maximum concentration of iron and steel industries? Analyse the reasons.
→
How did Mahatma Gandhi declare Civil Disobedience Movement?
→
Why did Gandhiji decide to launch a nationwide Satyagraha against the proposed Rowlatt Act, 1919? Explain.
→