Overdraft Account

A product that offers the customer flexibility to overdraw their account(s) upto the approved limit.

This product is designed for customers who may face time lags between receipt of payment from their debtors, and meeting their own obligation to their creditors. It provides continuity in the business operations while awaiting payment from the sale of goods and services.

The facility also enables customers to draw funds against uncleared effects in their accounts.

Benefits

• The customer ultimately determines the interest cost of their facility, since interest charges will be based on the amount overdrawn only.
  
• This gives the customer the flexibility to draw according to their specific financial needs at a specific time. For instance, the customer may require funds over a period of six months and may make the piecemeal withdrawals from their overdraft account as and when required. The interest charged will then be based only on amount overdrawn at that specific time, as opposed to a loan where the full amount is disbursed at once, and interest is based on the full amount.