what is the difference between cash credit facility and
bank overdraft?
3 Replies
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.
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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