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Cc a\c and od a\c?

AUDITOR VINOTHKUMAR (a) (870 Points)

06 December 2011

what is the difference between cash credit facility and

bank overdraft?

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Ashish Kulkarni (Article Trainee) (44 Points)
Replied 06 December 2011

Cash Credit (CC) is granted against the hypothecation of stock .The drawing limit

permissible is arrived at on the basis of stock held by the borrower. Branch has to obtain

the stock statement at the stipulated intervals from the borrower to have a watch over the

stock position and also to check the goods at regular intervals to satisfy about the

correctness of the declaration of the stock by the borrower. Withdrawals are to be

permitted within drawing limit arrived at on the basis of stock statement and godown and inspection.

Bank Overdraft: In case of Bank OD, a lien is obtained from the customer and collateral security is obtained if required. Generally Bank OD limit is less than CC limit which is granted to the customer.

AUDITOR VINOTHKUMAR (a) (870 Points)
Replied 06 December 2011

thank you sir............

Ashish Kulkarni (Article Trainee) (44 Points)
Replied 06 December 2011

No need to thank me yaar.. Glad that ur doubt is cleared

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