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A bank overdraft is a temporary facility extended by a bank to corporates and other clients to withdraw funds from their account in excess of the balance. This facility is provided by the bank for a fee and interest is charged on the excess amount that is withdrawn for the length of the time. With minimal documentation and fast disbursals, you can avail overdraft against your salary, to fulfil your financial needs and you have to pay interest only on the amount you actually utilised.
- Features:
- Easy Documentation.
- No Preclosure Charges.
- Easy to Use.
- Interest Only on Utilised amounts.
- High Loan Amounts.
An overdraft facility allows the facility holder to withdraw money from the account despite having no balance. There is usually a limit on the amount that can be overdrawn from the account. The overdraft limit is usually set by the bank basis the amount of working capital and credit worthiness of the facility taker.
- Over draft advantages:
- Handles timing mismatch of funds flow.
- Timely Payments.
- Less Paperwork.
- Flexibility.
- Interest Cost Benefit.
One needs to bear in mind that such facility comes with a high cost and should be used as a stop-gap management of funds or as an emergency activity rather than a routine funding activity. Higher dependence on overdraft for working capital management indicates poor working capital management and a liquidity constraint faced by the company.
The Salary Overdraft facility from Bank gives you the flexibility to withdraw an amount up to twice your in-hand salary at minimal interest rates that is charged as per usage-Conditions Apply.
You are eligible for Overdraft, if your salary account with the bank and has regular salary credits, your minimum net monthly income is Rs. 15,000/-, and your company is on our approved list for overdraft facility.
- What is an overdraft?
An overdraft facility allows the facility holder to withdraw money from the account despite having no balance. There is usually a limit on the amount that can be overdrawn from the account. The overdraft limit is usually set by the bank basis the amount of working capital and credit worthiness of the facility taker. - What types of transactions can cause my account to become overdrawn?
- The payment of checks, electronic funds transfers or other withdrawal requests.
- Payments authorized by you.
- The return of unpaid items deposited by you.
- Bank service charges.
- A hold on funds that you deposit with the Bank which, according to the Bank's Funds Availability Policy, are treated as not yet available or finally paid.
- What can I do to avoid overdraft or non-sufficient fund situations?
The best way to avoid overdraft or non-sufficient fund situations is to regularly monitor your account activity and balance your account frequently. - How does the Bank determine whether it will allow my account to be overdrawn?
The Bank has an automated system to determine whether transactions are paid or not. In making these decisions, we consider factors that include, but are not limited to, the length of your relationship with the Bank, the frequency of your deposits and your overdraft history. Since these factors can change over time, the Bank may decide to pay or not to pay transactions differently than it has in the past. You should not rely on the Bank to pay an overdraft just because we have in the past. - How much time do I have to make a deposit to cover an overdraft?
Overdrawn balances are due on demand, so it is important to keep your account in good standing by making a deposit to cover an overdraft as quickly as possible.
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