Keyword(s): Loan Agreement, Insurance Agreement, Banks, Credit, Collateral.
Abstract: In the conduct of its activities, the bank will always apply the principle of prudence, particularly in granting loans to prospective debtor. Banks are responsible for funnelling the deposits funds to the society. For each credit given, granting by the bank must be implemented carefully even though the maximum credit given is not so large or otherwise falls into the category of micro-credit. The application of the precautionary principle by the bank is implemented via additional agreement in the form of an insurance agreement. So the existence of this insurance agreement is contingent with the agreement anyway, namely micro-credit agreement. This is often in practice not be noticed by the bank, because the nominal plafond given relative small, candidate of the debtor was not asked to surrender collateral as security if later on it turned out that the debtor does not run obligations in accordance with agreed credit agreement. In granting credit should the bank gives equal treatment i. (More)