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51. LOAN
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OVER
DRAFT
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1.
Meaning
A
lumpsum amount is advanced for a period of one year or more
2.
Account
Separate
loan account is to be maintained by bank
3.
Borrowing Party
It is given to any party who fulfils
certain conditions.
4.
Interest Charged
It is charged on amount sanctioned whether
utilised or not.
5.
Security
Bank demands security for sanctioning loan.
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A specify limit is sanctioned for a
period say one to three months.
Separate account is not maintained. It is
included in current account.
It is provided only to current account
holders.
It is charged on amount withdrawn.
Bank may not ask for security, if amount
is less.
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LOAN OVER DRAFT
