CC (Cash Credit) Account

💳 What is a CC (Cash Credit) Account in Banking?

A Cash Credit (CC) Account is a type of loan account provided by banks to businesses for meeting their working capital requirements. It allows a borrower to withdraw money beyond their actual account balance, up to a certain limit sanctioned by the bank.

Think of it like a revolving credit line for businesses — they can borrow, repay, and borrow again, as long as they stay within the credit limit.

🧾 Example:

A business is sanctioned a cash credit limit of ₹10 lakhs. It can draw funds from this limit anytime for buying raw materials, paying salaries, etc., and repay when they have incoming cash flow. Interest is charged only on the amount utilized, not the entire limit.

🧩 Key Features:

• Meant for businesses and traders
• Funds used for day-to-day operations
• Interest charged only on the used amount
• Secured against collateral (e.g., inventory, receivables, fixed assets)
• Renewable annually after review

❓FAQs about CC Account

Q1: Who can apply for a CC account?
A: Businesses, traders, manufacturers, and service providers with regular working capital needs can apply.

Q2: Is it a type of loan or a bank account?
A: It’s technically a loan account, but it works like a current account with an overdraft facility up to the sanctioned limit.

Q3: What is the interest rate for a CC account?
A: Varies by bank and customer profile. Generally ranges between 9% to 15% per annum, charged on the amount used.

Q4: What is the security or collateral for a CC account?
A: Banks usually ask for stock-in-trade, receivables, or fixed assets as collateral. Sometimes a personal guarantee is also required.

Q5: What is the repayment structure?
A: There’s no fixed EMI. The borrower repays as per business cash flow. However, interest is paid monthly, and the account must be regularly adjusted (i.e., cleared and reused).

Q6: Can individuals open a CC account?
A: Not typically. CC accounts are designed for business or commercial use, not for personal finance.

Q7: What is the difference between CC and OD (Overdraft)?
A: