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Cash Credit Facility
If A person have current account in bank A with cash credit facility as per Rbi Rule if he wants to open another current account with bank B he have to submit Noc of bank A to B this for preventing fund diversion by customer if customer tactfully hoards the cash recieved from business and not pay the cash credit dues by showing its debtor default how can bank prevent such loss with Rbi has no guidelines regarding that ?
Replies (1)
The concern regarding fund diversion in Cash Credit facilities is addressed by banks through mandatory credit bureau checks, consortium lending arrangements, and contractual legal charges on assets, rather than a singular RBI mandate for an NOC.
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