Raiffeisen Bank 

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Infoline: 800 900 900

Bank overdraft

An overdraft enables the drawing of funds for no more than one year up to a limit set by the bank for the negative balance on a client’s current account in CZK or a foreign currency. The current balance of the loan is paid off from income that arrives on the current account. A client is under no obligation to draw funds up to the set overdraft limit.

 

Benefits

  • Option of ongoing drawing and payment of overdraft and related matters
    • Operative credit to cover fluctuations in the client’s financial needs up to a limit set by the bank
    • Not using the overdraft means a cost saving
  • As an overdraft is not tied to a specific purpose, a client can use it for short-term bridging of all its financial needs
  • Collateral for the limit on drawings is most usually the client’s trade receivables that are part of the process of purchasing, production and sale of products, or the client’s services, i.e. the collateral is directly related to the basic operational financing needs.
An overdraft is a suitable tool for very flexible management of a company’s cash flows.

 

 

Drawing and repayment

The limit on drawings is usually set by the bank for the client

  • For drawing periods that are contractually specified in advance and follow on from each other (e.g. one month)
  • In an amount that does not exceed the total highest contractually set amount of the overdraft and corresponds to the agreed minimum value of the collateral

For the provision or renewal of a limit on drawings on the overdraft the client submits to the bank

  • An application for drawings specifying the requested amount of the overdraft limit for further periods and possibly also
  • An offer of receivables or inventories for use as collateral, if they are to be used as collateral for the overdraft. The bank and client, however, may agree on another form of collateral for the overdraft

The overdraft is paid off as income comes in to the client’s current account with the set overdraft limit.

Collateral

The requirements for collateral for an overdraft are communicated by the bank to the client primarily based on the conclusions of an analysis of its financial results.


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