Dukandar Overdraft (OD) Facility

The Dukandar Overdraft Facility is a flexible credit line that provides a business (traders/ shopkeepers/merchants) with access to funds when needed.

The Overdraft facility allows businesses to draw funds up to an agreed-upon limit from their credit line as needed. Interest is only charged on the amount borrowed and for the duration of the borrowing period. There is no EMI. 

At HDFC Bank, you can apply for the Dukandar Business OD loan by fulfilling fundamental eligibility criteria. It is as follows: 

• You must be a retailer, shopkeeper, wholesaler or trader. 

• You must be a proprietor or business partner in the business to apply. 

• Your business must have been in operation for a minimum of three years.  

• You must submit 12 months' bank statements of your personal and business Bank Account. 

The maximum amount eligibility is ₹10 lakh. However, the outstanding obligation at the time of business overdraft loan sanction will be considered during the calculation. 

Visit the website: www.hdfcbank.com/sme >> Select Product Type – 'Working Capital >> Select Product – 'Dukandar Overdraft up to ₹10 lakh. 

The approval process for the Dukandar Overdraft for a business may take a few minutes via an online application from the website. 

Yes, you can use the funds from the Dukandar Overdraft facility for any business expense, such as inventory purchases, payroll, or equipment upgrades. It should cover your working capital requirement. 

If you don't use the full credit line amount, you'll only be charged interest on the amount borrowed. However, you can still access the remaining credit line if you need it in the future until the limit is reached. 

• For cases where the limit amount is more than ₹5 lakh, an overdraft fee comprising a 2% PF at the time of limit utilisation will be charged. The stamp duty is as per the local government charges, while GST rates will apply to PF.  

• For cases, the limit amount equal to or less than ₹5 lakh- no PF is charged. The stamp duty is as per the local government charges, while GST rates will be charged on PF.  

Under overdraft protection, if a client's checking account enters a negative balance, they will be able to access a predetermined loan provided by the bank and be charged a fee. In many cases, overdraft protection is used to prevent a check from bouncing and the embarrassment that this may cause. 

The pros of overdraft involve providing coverage when an account unexpectedly has insufficient funds avoiding embarrassment and "returned check" charges from merchants or creditors. But it's important to weigh the costs. Overdraft protection often comes with a significant fee and interest, which can burden the account holder if not paid off on time. 

You can avail of an Overdraft facility for your business needs. An overdraft facility can help you avail yourself of liquidity for working capital requirements when cash flows can't meet the requirement. 

An Overdraft fee comprises a 2% PF during limit utilisation. Stamp duty is as per the local government charges, while GST rates will be levied on PF.