CC full form in banking is Cash Credit. It is a short-term loan facility provided by banks to businesses for managing working capital needs. Under a CC account, a borrower can withdraw funds up to a pre-approved limit, even if their account balance becomes negative. This makes Cash Credit one of the most popular financing options for traders, manufacturers, and small businesses in India.
What Is Cash Credit (CC) in Banking?
Cash Credit is a revolving credit facility where businesses can borrow money against the security of their stock, inventory, or receivables. The bank sanctions a credit limit based on the borrower’s financial position and business requirements.
Unlike traditional loans, interest in a CC account is charged only on the amount utilized, not on the entire sanctioned limit.
For example, if you have a ₹10 lakh CC limit but use only ₹4 lakh, interest will be charged on ₹4 lakh only.
Features of Cash Credit
1. Revolving Credit Facility
Borrowers can withdraw and repay funds multiple times within the limit, just like using an overdraft account.
2. Interest on Utilized Amount Only
Interest is calculated on daily usage, making it a cost-effective option for businesses.
3. Secured by Assets
Banks usually require collateral such as stock, raw materials, finished goods, or receivables.
4. Helps Manage Working Capital
CC helps businesses meet expenses like salaries, raw material purchases, day-to-day operations, and bills.
Difference Between CC and OD (Overdraft)
| Cash Credit (CC) | Overdraft (OD) |
| Mainly for business working capital | Can be for personal or business use |
| Requires collateral like stock/inventory | May or may not require collateral |
| Limit based on business turnover | Limit based on account history or income |
Who Can Apply for a CC Account?
- Small and medium businesses
- Manufacturers
- Traders and wholesalers
- Startups with inventory
- Enterprises needing working capital support
In conclusion, Cash Credit (CC) is an essential banking facility that helps businesses maintain smooth operations by offering easy access to funds. With flexible withdrawals, interest-only on usage, and support for working capital needs, CC remains one of the most valuable financial tools for business growth and stability in India.