Annoucements
Overdrafts & CC
Home > Overdrafts & CC
About
Overdrafts & CC
An overdraft is a financial facility provided by banks that allows an account holder to withdraw more money than what is available in their account, up to a predetermined limit. It's essentially a short-term borrowing arrangement where the bank covers the shortfall, and the account holder is required to repay the overdraft amount along with any applicable fees or interest.
Overdrafts are commonly linked to current accounts, providing account holders with flexibility in managing their finances and handling unexpected expenses.
Documents Required
For personal accounts
- Duly filled Loan Application Form
- Passport-size photographs of the applicant
- PAN Card (mandatory)
- Aadhaar Card or any valid government-issued ID
- Residential Address Proof (e.g., electricity/telephone/gas bill)
- Proof of Business (for proprietors): GST Certificate / Shop & Establishment License / Udyam Registration / Trade License
- Latest Bank Statements (last 6 to 12 months)
- Collateral Documents (if facility is secured): Property documents / LIC policies / FDs Valuation & legal report of property
For institution/trust accounts
- Registration Certificate of the Trust/Institution
- Constitution/Bylaws of the Trust or Organization
- PAN Card of the Institution/Trust (If not available, Form No. 60 must be submitted)
- Board/Trust Resolution authorizing the borrowing and naming signatories
- Passport-size photographs & KYC documents of all authorized signatories
- Bank Account Statements (last 6 to 12 months)
- Audited Balance Sheet & Income Tax Returns of the Trust/Institution (last 2–3 years)
- Statement of Purpose / Utilization Plan for the credit facility
- Collateral Security Details (if secured OD/CC is requested): Property documents / Fixed Deposits / Third-party guarantee Valuation and legal verification reports
Cash Credit To Retail Traders & Wholesaler :
Bank Offers cash credit by keeping in mind the working capital requirement of clients to meet the gap between Current Assets & Current Liabilities.
- A cash credit is a drawing account against credit limit granted by the Bank and is operated in almost the same manner as a 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).
