Overdraft: O/D

An overdraft (O/D) is a short-term revolving credit extended to a business in order to provide convenience for instant access to extra cash in its daily transactions. The owner of the current account with an O/D line can withdraw money in excess of the remaining balance within the pre-approved limit.  

Benefits to the Customers 

• Improve working capital and liquidity position for the business. 
• Provide liquidity comfort whenever needed by allowing the customer to write cheques for payment out of the current account with an O/D line. 
• Repayment can be made immediately whenever there is a surplus in the account, thus reducing the business’ interest expense.