Under which of the following facilities the depositor in a current account is allowed to draw over and above his account up to a previously agreed limit?

Cash Credit

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Overdraft facilities

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Discounting Bills of Exchange

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Term Loans

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Consumer Credit

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Solution

The correct option is B
Overdraft facilities

The depositor in a current account is allowed to draw over and above his account up to a previously agreed limit under Overdraft Facilities.

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Similar questions

Q. Distinguish between:
1. Call loans and long term loans
2. Current account and saving account
3. Cash credit and overdraft facility

Q. Which of the following are included under representation functions of a bank?
(i) Payment of cheques and bills
(ii) Providing remittance facilities
(iii) Underwriting of securities
(iv) Advancing clean credit
(v) Allowing overdrafts on current account
(vi) Purchase and sale of securities.

An overdraft facility of up to 2500 rupees, which would further be enhanced by the bank to 5000 rupees over time was provided in Prime Minister launched Pradhan Mantri Jan Dhan Yojana. Consider the following statements regarding Overdraft:

1) An overdraft is an advance given by allowing a customer to overdraw his saving account upto an agreed limit.

2) The security for overdrafts is usually financial assets of the account holder such as shares, debentures, life insurance policies etc.

3) Overdraft is a temporary facility and the rate of interest charged on the amount of credit used is higher than that on cash credit.

Which of the above statement(s) is/ are incorrect?

Q. Overdraft, loans, cash credits and discounting of bill of exchange is an example of ______ functions.

Q. Overdraft facility is allowed to proprietor's personal account.

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Under which of the following facilities the depositor in a current account is allowed to draw over and above his account up to a previously agreed limit?

The correct option is B Overdraft facilities The depositor in a current account is allowed to draw over and above his account up to a previously agreed limit under Overdraft Facilities.

The correct option is B
Overdraft facilities

The depositor in a current account is allowed to draw over and above his account up to a previously agreed limit under Overdraft Facilities.