Table of Contents
How do I open a cash credit account?
The applicant must submit the following list of documents to avail a cash credit loan:
- Financial statements certified by a CA.
- Bank account statement for at least 6 months.
- IT returns for at least a year.
- Loan repayment record (if applicable)
- Proof of collateral.
- Other relevant documents requested by the bank.
How does CC account work?
A Cash Credit (CC) is a short-term source of financing for a company. It enables a company to withdraw money from a bank account without keeping a credit balance. The account is limited to only borrowing up to the borrowing limit.
What is cc limit in bank?
Cash credit limit or CC limit is a kind of current account with cheque book facility. CC limit holders offers stock and debtors as primary security to the bank. A CC limit or cash credit limit allows you to withdraw money or issue cheque up to the approved CC limit, even if there is no balance in the account.
Who is eligible for CC limit?
Cash Credit & Overdraft – Eligibility
Business Vintage | Minimum of 3 years |
---|---|
Turnover | Minimum 30 lakhs to Maximum of 30 crs |
Age | Minimum 21 years at the time of loan application Maximum 70 years at the end of loan tenure |
What is CC and CA account?
15 October 2009 Current account is open by a person for operation of his business i.e. he issue cheque from this account and deposit cheque for collection where as cash credit account is a credit facility given by bank and it is type of short term loan given by bank on the hypothication of stock.
Who can open cc account?
For cash-credit and overdraft (CC/OD) facility, banks with over 10 percent exposure can open CC/OD accounts; other lenders can have collection accounts; but have to debit money only to CC/OD accounts of banks that have more than 10 percent exposure to the borrower.
What is SS Kohli committee?
S.S. Kohli Committee Report on Rehabilitation of Sick SSI Units | Ministry of Micro, Small & Medium Enterprises. Ministry of Micro, small & Medium Enterprises. Prime Minister Employment Generation Programme and Other Credit Support Schemes.
What is Tandon committee?
The Tandon Committee was formed with the objective of framing guidelines for commercial banks for ensuring proper end-use of funds, for supervision and follow-up of bank credit. The Tandon Committee Report on Working Capital was submitted in August 1975.
Can banks open current accounts for borrowers with cash credit accounts?
Henceforth, banks can’t open current accounts for borrowers who have a cash credit account with any other bank. 2. If borrowers don’t have any cash-credit account with any bank, they fall under 3 categories:
What is cash credit in banking?
Cash credit is a facility to withdraw money from a current bank account without having credit balance but limited to the extent of borrowing limit which is fixed by the commercial bank. The interest on this facility is charged on the running balance and not the borrowing limit which is given by bank.
What is open cash credit and key cash credit?
Cash credit facility is extended in two forms viz. Open Cash Credit and Key Cash Credit. The mode of creating charge on prime security offered in case of OCC and KCC are different. In OCC, neither the possession of assets nor the ownership of the assets transferred to the lender.
Where is cash credit shown on the balance sheet?
Cash credit is shown in current liabilities under the sub-head “Short Term Loans ” in the balance sheet for accounting purposes. The bank providing the cash credit facility opens a current account in the company’s name. Journal and ledger entries are similar to those made for transactions in other bank accounts.