114. OCC Full-Form | What is Open Cash Credit (OCC)

By | December 23, 2019
OCC Full-Form | What is Open Cash Credit (OCC)

Everyone should know full forms of words related to everyone. This page provides best full form and tells what is the full form of OCC. So your search for OCC full form is over. Page is dedicated to a basic full form. Go through and get meaning of OCC

OCC — Open Cash Credit

OCC Full-Form refers to Open Cash Credit. OCC is a type of a bank account that serves enterprises of medium and small sizes. Any holder of an open cash credit account has the facility of cash credit against his receivables and stocks. Different criteria are followed by different financial institutes and banks for accessing the OCC account’s limit. Most of the time, the SME’s turnover forms the basis of the calculation of the limit of the open cash credit

OCC Full-Form | What is Open Cash Credit (OCC)

The facility of OCC or Open Cash Credit Account is offered by the Andhra Bank and Canara Bank in India. The Canara Bank offers the SOCC or Simplified Open Cash Credit Facility. The SOCC is basically a facility given by this bank to small entrepreneurs who are not able to maintain stock books in detail. This facility is available in the form of running limits. The running limit is renewed or reviewed every year. The bank has fixed the maximum limit to rupees five lakhs. The interest rate is in accordance with the bank’s prev ailing guidelines and is linked to the bank’s base rate. It is subjected to the alteration from time to time.

The facility of OCC or Open Cash Credit is also made available by the Andhra Bank for satisfying the requirements of the working capital of the medium and small-sized enterprises. The limit of OCC is assessed in accordance with the Cash Budget System, MPBF System or the Turnover Method. The minimum margins are between twenty and twenty-five per cent for stocks, and thirty per cent for receivables or book debts. The primary security includes receivable and stocks.

The collateral security for the limit up to rupees ten lakhs is null. The collateral security for the limit above rupees ten lakhs includes fixed assets like machinery, plant, building, lands, etc in accordance with the norms of the Andhra Bank. Any Guarantee or co-obligation is not needed for ten lakh rupees’ limit, but a third-party guarantee is required in accordance with the norms of the Bank for the OCC having limit above ten lakh rupees.

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