CC & OD Limit are often called “Running Loan Accounts” that are reviewed and renewed after one year, if required. Such loan accounts are best for manufacturers and traders so that they can manage their working capital and everyday cash flow requirements.
Cash Credit is a tool whereby companies can avail financial facilities for a short term to manage their regular working capital requirements. Apart from that, it also helps in the smooth functioning of the business units. It is primarily granted against the security of company’s stocks, current assets as well as on the basis of the company’s financial pro forma that enables to meet the present and future requirements of the account holder. Cash Credit Limit runs parallel to your current account whereby the amount withdrawn is in excess to the amount deposited.
Contrary to Cash Credit Limit, the OD Limit goes beyond the security of your current stocks and assets trusted to the bank and is offered against any type of property.