Difference
This query is : Resolved
08 August 2013
Cash Credit and Overdraft, both fulfill the requirement of Working Capital of the borrowers. However, Cash Credit is for specific use of limit which is given on the basis of value of book debt and value of paid up stock. Limit of 75% is given calculated on (Value of book debt+Stock-Creditors). For this borrower is supposed to furnish the stock statements in given format of the bank on monthly basis based on which limit will be sanctioned.
Overdraft - An extension of current account in which the customer is allowed to withdraw more than the credit balance lying in the account. This may be a temporary accommodation to tide over temporary cash crunch or on a regular basis. If permitted on a regular basis, withdrawals are allowed up to a ceiling (called a limit), subject to availability of sufficient security with the bank.
Overdraft is generally for small working capital requirement but where larger funds are required C/C limit is preferred.
Overdraft - An extension of current account in which the customer is allowed to withdraw more than the credit balance lying in the account. This may be a temporary accommodation to tide over temporary cash crunch or on a regular basis. If permitted on a regular basis, withdrawals are allowed up to a ceiling (called a limit), subject to availability of sufficient security with the bank.
Overdraft is generally for small working capital requirement but where larger funds are required C/C limit is preferred.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Amount transferred in HUF Account
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Nursery business
- GST input credit on commercial property
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- Working on Gold wastage during Melting of old gold jewellery
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- TDS on Dashcam rent and allied services
- Royalty payments to the Mining Department for procurement of murum - GST input
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
