Bank cash credit limit & bank open cash credit limit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 What is deffrance between Bank Cash Credit Limit & Bank Open Cash Credit Limit,
Can one company avail this both limit at time

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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08 September 2013 Cash credit limit is against stock with collateral and can be used for purchase and sales of goods.

The open Cash Credit Limit is bank sections one Cash Credit limit with sub heads like
1) L/C
2) Bill Discounting
3) High Seas Sales
4) Packing Credit
5) Cash Credit
and so on and so forth

Now the limit sanctioned against each head can only be used against that particular head but once the same is converted to Open Cash Credit Limit in that case your overall limit is fixed and it can be used against any of the sub limit but the over all limit will remain same. Suppose you want to buy more materials and your limit is say 5 Cr. but other open limits are there then you can utilise those limits and exceed 5 Cr. under Open Cash Credit Limit

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