Overdraft: –

• Overdraft is an operative account, which is allowed to be operated up to a pre-sanctioned limit.
• The borrower may remit funds into the account reducing the debit balance or he may draw on the account up to the limit.
• The Target Group is Individuals, Traders and Industrial Concerns.
• The overdraft may be unsecured, partly secured or fully secured against pledge, mortgage or hypothecation of securities acceptable to the Bank.

Cash Credit: –

• A cash credit is a drawing account against credit limit granted by the Bank and is operated in almost the same manner as an Overdraft account.
• The distinction between an Overdraft and a Cash Credit is in the nature of the security.
• When the advance is secured by the pledge/hypothecation of goods or produce, it is treated as a Cash Credit Account.
• The security may be changed from time to time according to the borrower’s business requirement provided it always fully covers the balance outstanding the account (with the stipulated margin).

Bill Purchase / Discounting:-

• Post-Sale limits are extended by way of discounting/ purchasing of bills/cheques, advances against book debts etc.
• Bill Purchase – These may be in the nature of on demand Clean or Documentary bills being the bills payable on demand drawn on outstation centres for which immediate credit is afforded to your business account less our discount and handling charges.
• Usance Bill Purchased – Usance Clean or Documentary bills are bills payable on due date after expiry of the usance period drawn on drawees/payees against which immediate credit is given to your business account less interest for the usance period, handling charges, postage etc.
• Cheques Discounted – Outstanding cheques/drafts drawn on our bank or other banks are purchased and immediate credit is afforded to your business account less our discount/commission

Contact our advisor to know more about Working Capital Finance in India or Working Capital Funding Companies in India.