- 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).
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