cash credit account
This query is : Resolved
18 December 2009
Sir, I want to know that there is a limit in cash credit account as overdraft account
18 December 2009
No
However; cash credit and overdraft accounts are different from each other.
Cash credit is given on the security of stocks; whereas overdraft now-a-days are given by the banks on the basis of FDRs generally.
Although in the mode of operation there is no change.
However; cash credit and overdraft accounts are different from each other.
Cash credit is given on the security of stocks; whereas overdraft now-a-days are given by the banks on the basis of FDRs generally.
Although in the mode of operation there is no change.
18 December 2009
agree, No Limit and No different between each other. Entry would be same.
20 December 2009
I think, Cash credit Account having limit
20 December 2009
Regarding availability of limits from banks it depends upon the value of security and desired margin by bank. Generally banks provide 75% of limit of the asset hypothecated/pledged. On 25% of value of the assets; the banks do not finance which is known as margin. The logic behind is that the borrower should have some capacity to run the business and in case there is defaults in payment of interest they will be secured fully.
However; withdrawal facility from both the accounts are predetermined by the bank. In this sense both are same.
However; withdrawal facility from both the accounts are predetermined by the bank. In this sense both are same.
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