Cash credit and overdraft

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Rekha (Querist)
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28 January 2009 Hi friends, could you please help me out............ Want to know the difference between cash credit and overdraft

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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28 January 2009 Cash Credit and Overdraft, both fulfill the requirement of Working Capital of the borrowers. However, Cash Credit is for specific use of limit for stock of material or book debts generally for which the limit is sanctioned and the borrower is supposed to furnish the list of these items on periodic basis while the OD limit is used in business not for a specific purpose and no periodic returns are to be submitted.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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08 February 2009 In case of Cash Credit, primary securities are Stock-In-Trade and Books Debts and in case of OD it can be anything other than stock and book debts.

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