Question

Select a word or a term or phrase which can substitute the following statement:

Permission to withdraw over and above the credit balance from the current account.

• A. Cash credit facility
  
• B. Overdraft facility
  
• C. Loan facility
  
• D. None of these
  

Answer 1

Answer: (B)

Overdraft facility

Overdraft facility is usually given to the current account holders to resolve short-term financial crisis. It is a facility attached to an existing account. Amount over and above the credit balance can be withdrawn with a limit as agreed for.

Cash credit and Loan are separate accounts opened for the purpose of raising funds.