DEFINITION
Daylight Credit

"Daylight credit": Credit transfer. An intra-day exposure of a bank when account is in an overdraft position at any time during the business day vis-à-vis credit extended for a period of less than one business day. Daylight credit may be extended by central banks to even out mismatches in the settlement of payments. In a credit transfer system with end-of-day final settlement, daylight credit is tacitly extended by a receiving institution if it accepts and acts on a payment order, even though it will not receive final funds until the end of the business day. Also known as Daylight overdraft, Daylight exposure, or Intra-day credit.
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