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Question
Observe the given image and identify the correct explanation for the given image.
Options
An overdraft is a kind of a temporary financial accommodation extended by a bank to its regular customer.
Is a document or certificate issued by a company under its seal as an acknowledgement of its debt.
This implies procuring cash from a bank in exchange for credit instruments.
It is a formal and revolving credit agreement under which the borrower is allowed to borrow up to the specified limit.
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Solution
It is a formal and revolving credit agreement under which the borrower is allowed to borrow up to the specified limit.
Explanation:
Cash credit is a formal, revolving bank facility allowing the borrower to draw funds up to a sanctioned limit as required; interest is charged on the amount actually withdrawn, and security is usually required.
