Question

It is a formal and revolving credit agreement under which the borrower is allowed to borrow upto the specified limit.

विकल्प

• Cash credit

• Overdraft

• Discounting of bills

• None of these

Answer 1

Cash credit

Explanation:

Cash credit is a formal, revolving credit agreement under which the borrower is allowed to borrow up to the specified limit. The amount may be withdrawn in instalments. Interest is charged on the amount actually withdrawn. The borrower is required to offer security in the form of tangible assets or guarantees.