LOAN CASH CREDIT

50.  LOAN
CASH CREDIT
1.      Meaning
A lumpsum amount is advanced for a period of one year or more
2.      Account
Separate loan account is to be maintained by bank
3.      Borrowing Party
It is given to any party who fulfils certain conditions.
4.      Interest Charged
It is charged on amount sanctioned whether utilised or not.
5.      Security
Bank demands security for sanctioning loan.

A specific limit is provided by a bank for a period say 6 months to one year.

Separate cash credit is to be maintained by bank

It is given to any party who fulfils certain conditions


It is charged on amount withdrawn


Bank demands security of tangible assets to sanction cash credit.