Why can we not get a loan on current account in India?

Saw this random video in which Ashneer was asking the reason why no loans are available on current accounts in banks in India. Really made me think and I couldn't come up with any logical reason. So many companies have cash reserves they build over time, what's the point of taking a loan or transferring that amount to different accounts instead of just using current account balance and getting an interest on it? It's not a taxable account, but the money is just sitting there with no interest accumulation or utility. Thoughts? Are there any startups that are maybe addressing this problem?

Matilda Carmden

X.com

a year ago

That's because the bank knows the money in the current account will get used up when the company is not doing well and the risk associated with this kind of loan basically equates it to unsecured loan so they don't want to get in this kind of risk without any guarantee or collateral.

Blair Lee

Stealth

a year ago

Kab Tak gold girwi rakhenge dukaan chalane ke liye saar

Kendall Lee

X.com

a year ago

Yaar mere idhaar toh dukhan hi bank girvi rakhwa keh OD limit banate. I very well understand the plight of doing business but the system is messed up.

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Jordon Carmden

Startup

a year ago

FDOD bana lo

Anise Nadeen

Stealth

a year ago

Doesn't work because you have to break FD to be able to use those funds. Startups need cash on hand for possible emergencies.

Kendall Lee

Startup

a year ago

Bhai I work in a startup myself, if you're having to break FDs which back FDODs to use emergency funds then you might as well have a hard look at your fund position, also beyond a point of ₹₹₹₹, all FDs become callable anyway

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Blair Lee

Startup

a year ago

Bootstrapped and Series-A, series B on the way

Coy Lee

Stealth

a year ago

Once you get to series A/B you've mostly already crossed the death valley of startups. Those startups are not the ones that think twice about FDOD or credit.

Isaiah Carmden

Stealth

a year ago

*FDOD or debt