An overdraft (OD) facility is a type of credit facility offered by banks to their customers, allowing them to withdraw more money than is available in their bank account. Essentially, an overdraft allows account holders to borrow money from the bank in the form of a short-term loan, typically for a period of 30 to 90 days.

OD facilities are designed to provide account holders with a safety net in case of unexpected expenses or temporary cash flow shortages. For example, if a business needs to pay its employees before its next round of funding arrives, it may use an OD facility to cover the payroll.

The interest rate charged on an OD facility is typically higher than the interest rate on a traditional loan or line of credit, and the bank may also charge additional fees for each day that the account remains overdrawn. As a result, it's important to use an OD facility judiciously and only when necessary.

To apply for an OD facility, account holders typically need to have a good credit history and a stable source of income. Banks may also require collateral or a personal guarantee from the borrower, depending on the size of the overdraft.