Sample Letter to Bank for Reduction of Cash Credit (CC) Limit

Cash credit limit is generally sanctioned by a bank to the small to medium scale businesses to fulfill their working capital requirements i.e. to meet daily fund needs.

It is a short-term credit facility, which allows the borrower to withdraw money or issue cheque up to the approved CC limit. The borrower will have to pay interest on monthly or periodically as decided by the bank on the utilised loan amount.

A borrower may decide to reduce his CC limit in order to control his limit utilisation and save interest paid on it. You can visit the bank's branch office to request a reduction.

Here is an example of a request letter to the bank manager for the reduction of cash credit limit.

TEMPLATE

Date: ________

To

The Branch Manager

(Name of the Bank)

(Name of the Branch)

(Address)

Sub.: Request for reduction of CC limit 

Dear Sir/Madam,

With reference to the captioned subject, we would like to state that we have a current account bearing number __________ in your branch and there is a cash credit facility approved on the said account.

We request you to reduce our cash credit limit as per the following details:

  Existing CC limit: ___________ per annum,

  New CC limit: __________ per annum.

The requested new CC limit will be sufficient for us to meet the fund needs of our business. Hence, we are applying for a reduction in the limit.

Kindly do the needful and oblige.

Thanking you,

Yours faithfully,

    (Signature)

(Name of the Account-holder)