The
Definition Of

Overdraft on Current Account

An overdraft allows to borrow money for a short period of time through current account, with or without security. So, it is a credit facility for a current account customer.

A banker, on being satisfied as to the financial standing of his customer or after receiving proper securities, will allow the customer to overdraw his current account, in which case, the overdraft would be a sort of temporary advance by the banker.

Share it:

More from this Section

  • Junk bonds
    Junk bonds cen be defined as bonds with ratings below Baa (or BBB) that have a high default risk.
  • Swap Transactions
    A swap transaction involves a spot transaction along with a corresponding forward contract that will ultimately reverse the spot transaction. Many forward contracts are negotiated for this purpose.
  • AQIS
    AQIS is an acronym of Australian Quarantine and Inspection Service
  • Synergy
    Synergy is the notion that a combined firm is worth more than the two firms are individually.
  • Offer
    Offer refers to the price at which a trader is willing to sell foreign exchange, securities, or commodities. Also called “ask.”
  • FAS #8
    FAS #8 is a regulation of the Financial Accounting Standards Board requiring U.S. companies to translate foreign affiliate financial statements by the temporal ...
  • Red Clause Credit
    Red Clause Credit documentary credit provision, which allows the beneficiary (seller), to draw partial advance payments under the