Overdue

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RAJAGOPAL (Querist)
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15 December 2011 When does a cash credit account becomes overdue? also if the balances in the account for a month is above cc limit do we need to bring to notice of the management.

@VaibhavJ

@VaibhavJ (Expert)
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15 December 2011 CC a/c becomes overdue in two cases:
1) when full amount of Interest due is not paid &
2) when excess CC credit limit utilised in not settled in due period for which cc limit is granted.

EG. If cc limit is Rs. 1 Lac so:

1) Int levied at month end is not repaid by cash credit to that a/c then CC a/c becomes overdue

2)If outstanding bal is above 1 lac & amount utilised in excess of 1 lac is not repaid in credit period granted then a/c becomes overdue.

Balance in the account for a month above cc limit is need to be bring to management notice to settle it through cash credit to avoid penalty.