OMTEX CLASSES: Overdraft facility is not provided to the current account holders.

Overdraft facility is not provided to the current account holders.

Ans. I do not agree with the statement because of the following reasons.

Current account deposit is usually opened by businessmen, corporations, industrial enterprises, public bodies, trustees etc. The account facilitates them to carry out their transactions with minimum cash at hand, as the deposits are withdrawable any time by the depositor by means of cheques.

Usually, there are no restrictions on the amount of deposits. At the same time depositors can withdraw any number of times from this account. Overdraft facilities and agency services are provided by the bank to the current account holders. Very low interest or no interest is paid on the current account deposits. Banks may charge a nominal rate of interest for providing this facility.