New Delhi: Indian banks offer an overdraft facility that allows individuals to take advances from the bank. The facility can be used in financial emergencies as the advance payment can be made without a cent in the bank account.
In fact, the overdraft is basically a short-term loan that allows the bank’s customers to take out a small loan to help them weather emergencies.
Which banks offer an overdraft facility?
Government banks such as the State Bank of India (SBI), as well as one of the country’s leading private lenders, ICICI Bank, offer overdrafts to their customers across India.
How much can you withdraw using the overdraft service?
In times of crisis, customers of the bank can claim an advance of up to three times their monthly salary by using the banking service. However, every bank has different limits, which also depends on the financial profile of the customer.
If you are an employee, you must have received several messages from the bank regarding the overdraft facility. Banks usually inform their customers in advance of their usage limit.
In addition, the service is not even offered to all workers, and in some cases the bank only awards a percentage of the employee’s monthly salary.
Conditions of the current account credit
The terms and conditions of the service are a bit complex. First of all, only selected banks in India currently offer overdrafts to individuals. Second, the service is aimed at employees who have a salary account at the bank.
Most importantly, the bank also takes a look at the creditworthiness of the customers before paying the advance to the bank accounts. Those who meet the conditions can easily use the bank facility to deal with sudden financial difficulties. Also read: Aadhaar card update: You don’t like an existing photo? How to change the photo to aadhaar
How much interest does the bank charge?
The interest rates for the advances drawn under the overdraft facility vary from bank to bank. In most cases, the bank charges between 1% and 3% interest on advances drawn on the overdraft facility. Also Read: Google Launches Pixel Buds A Series In India, Check Out The Price, Features, And More