Definition

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:  Cite

More from this Section

  • Inventory investment
    Inventory investment is the spending by firms on additional holdings of raw materials, ...
  • Reciprocal exchange
    Reciprocal exchange refers unincorporated mutual insuring organization in which insurance ...
  • License fees
    License fees are remuneration paid to the owners of technology, patents, trade names, ...
  • Nominal anchor
    Nominal anchor is a nominal variable such as the inflation rate, an exchange rate, or ...
  • Inflation Premium
    Inflation Premium is a premium for anticipated inflation that investors require in addition ...