about Bank loan

Usually, the borrower(customer) is allowed to open a current a/c subject to bank norms and allowed to draw amount subject to limits with some interest agreed upon for every withdrawal beyond debit balance... Cash credit is a type of short term loan arrangement which should be repaid along with intertest within the period agreed upon... 

So if Iam not exact anywhere in these let some body clarify me.... 

In CC limit bank fixed our DP limit. Genrally the CC limit is secured by hyphotication of stock.

we can use cr facility extent of our limit.

i want to prepare project report

Bank OD is that when there is nil balance we can issue a cheque.

CC facility is that when there is nil balance we can withdraw the cash.

If bank is allowing the customer to with draw an amount which is not there in the account, then the same will be termed as OD or Over Draft.  In both the case sof OD and Cash credit customer will be allowed to with draw over and above the account actual or clear credit balance.

Main difference between OD and a cash credit are,  OD will be provided against any type of collateral where as CC ( Cash credits) will be against stocks or commodities or say receivables.

In both the cases, bank defines the limits and limits are generally derived as a percentage of the value of the collateral bank accepts.

In case of CC, bank may insist on periodic statements, based on whcih the available limits will be varying.

Eg:   Sanction limit ( based on Credit analysis by Bank)  :  Rs 500,000

Margin of 20%

Value of collateral is say Rs 600,000

Amount available for cusomer will be 6lacs - 20% of 6 lacs ( ie 4.8 lacs) and not entire 5 lacs.  This is how bank controls the over all limit in case of CC facility. In case of OD,  limits will be provided based on say land and buildings,  then the limit available to customer will not vary.

Hope this clarifies.

i am totally agree with uday's answer.

Genterally Bank OD is facility allow by bank to use amout exceeding available credit balance upto some limit. while in CC limit utilization on amt is allowed to certain percentage of current assets like stock or receivables. Amt available in account is necessary in CC facility.

totally agree with mr. Uday Kanth

there is nothing more about cc and od to differentiate.

depending upon the suitability the customer chooses the facility among two.