Difference between CC and OD
This query is : Resolved
Ravi Kumar Rajgaria
(Querist)
30 April 2009
What is the difference between CC and OD in terms of bank?
CA. B.SRINIVASULU
(Expert)
30 April 2009
CC means cash credit given on the basis of stock, debtors,
OD means overdraft given on the basis of Fixed Deposits, house, shops , car , lorry, tractor etc.,
OD means overdraft given on the basis of Fixed Deposits, house, shops , car , lorry, tractor etc.,
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30 April 2009
Cash credit Account
This account is the primary method in which Banks lend money against the security of commodities and debt. It runs like a current account except that the money that can be withdrawn from this account is not restricted to the amount deposited in the account. Instead, the account holder is permitted to withdraw a certain sum called "limit" or "credit facility" in excess of the amount deposited in the account.
Cash Credits are, in theory, payable on demand. These are, therefore, counter part of demand deposits of the Bank.
Overdraft
The word overdraft means the act of overdrawing from a Bank account. In other words, the account holder withdraws more money from a Bank Account than has been deposited in it.
This account is the primary method in which Banks lend money against the security of commodities and debt. It runs like a current account except that the money that can be withdrawn from this account is not restricted to the amount deposited in the account. Instead, the account holder is permitted to withdraw a certain sum called "limit" or "credit facility" in excess of the amount deposited in the account.
Cash Credits are, in theory, payable on demand. These are, therefore, counter part of demand deposits of the Bank.
Overdraft
The word overdraft means the act of overdrawing from a Bank account. In other words, the account holder withdraws more money from a Bank Account than has been deposited in it.
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Manmohan ACA, CS
(Expert)
01 May 2009
completely agree with Devanshi Gandhi
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