An Overdraft is a form of credit facility by which a customer may be allowed to draw beyond the deposits of its current accounts for the sole purpose of the day-to-day operational needs of a viable and ongoing business. The outstanding balance of the Overdraft is repayable on demand by the Bank. It is financed for a limited duration normally for one year.

Based on strict and continuous follow-up, the Bank will callback the outstanding Overdraft loan balance at any time when its performance is unsatisfactory.

Overdraft facility is reviewed every year unless the Bank demands it to be reviewed by the Credit Approving Team for any remedial action when the performance of the account is deteriorating.

Interest is charged on the Overdraft Facility’s outstanding balance on a daily basis.

The customer or his/her legal agent must submit renewal request one month prior to the expiry date, and the concerned Customer Relationship Manager should advice the customer accordingly.

Overdrawal

An Overdrawal is a temporary facility that grants a customer the right to withdraw a specified amount of fund over and above the Overdraft limit in order to meet unexpected seasonal cash shortage.

In principle, the Bank does not encourage an Overdrawal. But, in certain circumstances, depending on the relationship with the customer, Overdrawal may be allowed for a maximum period of two months (60 days) and may be approved only twice in a twelve-month period.

The Overdrawal amount should not exceed 25% of the approved Overdraft limit or Birr five million, whichever is lower.

Each Credit Approving Team shall decide Overdrawal requests within their discretionary lending limit.

The Overdrawal shall be availed to Credit Risk Grade1 or 2 customers.

Clik here to read about the Eligibility Criteria to apply for Overdraft.

Clik here to read about the General Eligibility Criteria to apply for Credit.