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WHAT IS THE CASH CREDIT AND LETTER OF CREDIT?
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Answer / jiban sankhali tripathy
cash credit is a system by which a banker allows credit
limit to his customer against hypothecation of stock (i.e
store items,finished goods & semi-finished goods.)
letter of credit is a system by which a banker gives th e
credit limit to his customer by taking some margin money
without any hypothecation of stock.
| Is This Answer Correct ? | 20 Yes | 3 No |
Answer / bharathi
CASH CREDIT - CREDIT GIVEN BY BANKERS AGAINST OUR STOCK /
HYPOTHECATION OF DOCUMENTS OF OUR COMPANY / DIRECTORS
NETWORTH WHICH CAN BE USED FOR OUR BUSINESS ROUTINES FOR
WHCIH BANKERS WILL CHARGES US INTEREST ON MONTHLY BASIS
LETTER OF CREDIT - CREDIT GIVEN BY BANKERS FOR THE PURPOSE
OF MAKING PAYMENT TO OUR SUPPLIERS - LC TO BE OPENED
AGAINST OUR PURCHASES MINIMUM OF 30 DAYS & MAXIMUM OF 180
DAYS - MARGIN MONEY (MIN 10% MAX 30%) TO BE DEPOSITED BY
US. THE BANKERS WILL RELEASE PAYMENT TO OUR SUPPLIERS ON
BEHALF OF US. AT THE TIME OF MATURITY OF LC, THE AMOUNT
WHICH HAS BEEN PAID BY BANKER TO BE RETURNED TO THEM WITH
INTEREST AND MARGIN MONEY WHICH WE HAVE DEPOSITED AT THE
TIME OF OPENING LC WILL BE REFUNDED BY BANK WITH INTEREST
AND WE CAN OPEN NEW LC TO THE NEW SUPPLIER OR EXISTING
SUPPLIER AGAINST OUR PURCHASE
| Is This Answer Correct ? | 17 Yes | 1 No |
Answer / sheetal kumar garg
cash credit is a facility which is provide by bankers to
the customers on behalf on stock. while letter of credit is
a facility given by bankers to the customer with out stock
and with out margin money.
| Is This Answer Correct ? | 8 Yes | 3 No |
Answer / muralidharan t
Cash credit is a facility enjoyed by the traders from the
bank against hypothecation of stocks whereas the letter of
credit is a facility given by banks to the customers without
hypothecation of stock with margin money(safest lending) or
without margin money (competitive technology being followed
by different banks) for a stipulated period and
responsibility vested with one of the parties involved in
the letter of credit
| Is This Answer Correct ? | 5 Yes | 0 No |
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