Open Cash Credit (OCC)
Open Cash Credit, or OCC, is a term that applies to SME business owners. The owner of an OCC account may use a cash credit facility against his or her stocks and receivables. The loan's objective is to cover the SME's deficiency in working capital. The criteria used by different banks to determine an OCC account's limit vary. The OCC limit is typically determined based on the SME's annual turnover. To determine the limit of such an account, MPBF or a cash budget system may be used in some circumstances.
The amount that can be drawn from an OCC holder depends on the stockpiles of finished goods, unpaid invoices, raw materials, and currently manufactured goods. Drawings on the OCC account are not insecure. Stocks and receivables may need to be associated with the bank as security. There are times when a bank may additionally need collateral in the form of property or equipment. Every year, the drawing limit is reviewed, and depending on the state of the SME, it may be increased.
Bank OCC a/c is a group defined under which group?
Bank OCC a/c is a group defined under liability group. Business owners can access credit from their bank through an "open cash credit" account without submitting a formal loan application.