Maharashtra State BoardHSC Commerce 12th Board Exam
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Distinguish Between: Cash Credit and Overdraft Facility - Economics

Distinguish Between

Distinguish between: 

Cash credit and overdraft facility 

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Solution

Bases Cash credit Overdraft facility
Definition A loan taken in the form of cash by anyone from the bank against some securities is called cash credit. Commercial banks allow their customers to withdraw an amount from the bank in excess of their balance.
Drawers Anyone can take a cash loan from banks against some securities. Only current account holders can avail this facility.
Interest rate charged They charge higher rates of interest against a cash loan. They charge minimal rates of interest against an overdraft.
Concept: Commercial Banks
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 12 Commercial Banking
Exercise | Q 1.3 | Page 110
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