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| Working Capital Loans |
Woking Capital Limits (Cash Credits) / OD Limits :-
Advances by Indian Banks, generally take the following three forms,
i.e., cash credits, overdrafts and Loans. A cash credit is an
arrangement by which a banker allows his customer to borrow money upto a
certain limit against the values of his stocks and book debts for his
day to day requirements. This is the most favourite mode of borrowing by
large commercial and industrial concerns in India, on account of the
advantage that a customer need not borrow at once, the whole of the
amount he is likely to require, but can draw such amounts as and when
required. He can put back any surplus amount which he may find with him
for the time being. The banker granting cash credit and overdraft
facilities has to estimate the amount of his customers requirements, and
in case the actual drawings fall much below his estimate, he may lose
interest on the funds remaining ideal...
Overdrafts:- When a customer requires
temporary accommodations, he may be allowed to overdraw his current
account, usually against collateral securities. From the customer's
point of view, this arrangement like the cash credit is advantageous as
he is required to pay, interest on the amount actually used by him. The
essential difference between a cash credit and an overdraft is, that the
latter is supposed to be a form of bank credit to be made use of
occasionally; whereas the former is used for long terms by commercial
and industrial concerns during regular business. In practice, however,
this distinction is not always observed and some banks set up regular
limits for overdrafts also.
For more details, please CLICK HERE
To apply for working capital / OD limits Loans, Please visit www.moneimatters.com OR Email us at info@moneimatters.com
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