Working Capital Loan And Cash Credit System

The lending bank may try hard to arrive at a realistic estimate of the working capital requirement of a client company over a certain length of time in future
But the latter has hardly any stake in the accuracy of this exercise so long as the sanctioned limit is set at a sufficiently high level
The profitability of the lending bank may be adversely affected due to such indifference and inefficiency of its clientele.
This is a drawback of the cash credit system