MCQs · Q2
Q.Under Cash Credit, interest is charged on:
(a) the full sanctioned limit, always
(b) only the amount actually withdrawn/outstanding
(c) a fixed flat amount regardless of use
(d) the customer's savings account balance
Tamil Nadu DgeTextbookSubjectiveImportance★★★★★
36% · 8/22 Questions
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Start your 14-day free trial to unlock the full solution →Under Cash Credit, the bank sanctions a credit limit against security, but the borrower is charged interest only on the amount actually drawn and outstanding at any time — not on the entire sanctioned limit, whether used or not. This is precisely what distinguishes Cash Credit from an ordinary Loan, where interest runs on the full disbursed sum regardless of how much the borrower has ac …
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