Current account /cash credit/overdraft

  • August 7, 2020
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Subject: Economy

Context:

RBI has put in place certain safeguards  amid rising concerns over borrowers using multiple operating accounts, both current as well as cash credit (CC)/overdraft (OD).

Concept:

  • An overdraft is an extension of credit from a lending institutionthat is granted when an account reaches zero.
  • The overdraft allows the account holder to continue withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal
Current account /cash credit/overdraft economy