<p><p><p> Lending is one of the two principal functions of commercial banks. It is not only because of their social service to cater </p> <div>to the credit needs of different sections of the community but also because lending is the most profitable activity, for the </div> <div>interest rates realized on business loans have always been well above those realized on investments. Having sterilized </div> <div>a portion of deposits in the cash reserve and highly liquid assets, which yield little or no earnings for the purpose of satisfying the liquidity </div> <div>requirements, a banker has to deploy the residual funds in profitable outlets so that the banker may be able to pay interest on deposits, salary to </div> <div>the staff, meet other establishment expenses, build up reserves and pay dividend to the shareholders. This is why bank loans account for a major </div> <div>portion of residual funds of a commercial bank. An examination of some of the important characteristics of bank loans would provide an insight </div> <div>into the lending activities of a Canara bankS. In this paper an attempt is made to analyse the lending performance of Canara Banks in Dindigul </div> <div>district.</div></p></p>