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.

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