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Write short notes on Overdraft facility. |
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Answer» Overdraft Facility: Commercial banks lend money to businessmen, farmers, artisians and others in many ways and one of the facility is overdraft facility. Overdraft means an arrangement under which a current account holder is allowed to withdraw more than the balance to his credit upto the specified limit given by the bank. Overdraft is allowed for a short period and interest is charged on it. Commercial banks provide overdraft facility on the security of some assets or on the personal security of the account holder. |
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