Overdraft Facility
That’s correct! An overdraft facility in a Current Account allows the account holder to withdraw funds even when the account balance is zero or insufficient to cover the withdrawal. It is a type of credit extension provided by banks, such as Jivan Commercial Co-Operative Bank Ltd. The amount of funds available for overdrawn is typically predetermined and referred to as the overdraft limit.
The overdraft facility is a personalized service that can be beneficial in unexpected or urgent financial situations. It allows individuals or businesses to access additional funds beyond their available balance temporarily. The specific overdraft limit is determined based on factors such as the value of the Current Account, repayment history, credit score, and the relationship between the account holder and the bank.
By having an overdraft facility, customers are authorized to withdraw funds up to the specified limit. This can be useful for managing cash flow, addressing immediate financial needs, or covering unexpected expenses. It is important to note that overdrafts usually incur interest charges and may have associated fees, which vary depending on the terms and conditions set by the bank.
Features
- The Clean Overdraft Facility, in accordance with RBI regulations, allows for a specific limit without the need for any collateral except for two guarantors.
- The Overdraft Facility in a Current Account permits withdrawals even when the account balance is zero.
- By availing the Overdraft Facility against Fixed Deposits, you can access funds without liquidating your Fixed Deposits held with our bank.
- The Secured Overdraft is designed to meet the short-term financing needs of businesses. This scheme offers an overdraft facility by using property as collateral at a reasonable interest rate.
- Interest on the overdraft facility is charged only on the utilized amount and the duration of usage, which may vary from a few days to several weeks.
- The limit for the overdraft facility can be adjusted, increased, or renewed based on the customer’s requirements and in compliance with banking regulations.
- The period for this overdraft facility ranges from 45 to 365 days.
