Our "¥" gen F B friends were waiting for arrival of Shri Nagpal ji, as soon as he came in DK and his senior colleague Shri Shyam Roychoudhary greeted "Good Morning". Sir let us begin where we have left.
Shri Nagpal continued with a smile.
Let us first understand what are contents of QIS in brief :-
QIS- I
It is a Projection for Sales and Working Capital requirement for the ensuing quarter(next quarter).It is to be submitted One Week Before the Commencement of the quarter. A banker has to look into the quarterly Projections of Production, Sales given by the borrower vis-à-vis the Yearly data given earlier (based on which Yearly WC limits were sanctioned).
Based on this the Borrowers CA and CL position is judged and Operative WC limits are worked out.
The Limits are communicated to the borrower.
"Vow!!! How scientific!" exclaimed DK and agreed by SR.
Operative Limit is = Lessor of 1 or 2
1) Drawing Limit=
Chargeable CA - (Margin+Credit Purchases)
2) Limit Sanctioned.
Quipped DK, Sir Example.
Shri Nagpal with his calm composed manner enumerated.
Consider the live example of SRS Ltd. We have sanctioned WC limit of Rs 250 Crores to them on Accepting their Sales projections of Rs1,260 Cr. and Production target of Rs.1,100 Cr.(COP) of 24000units.
The sales and production for ensuing quarter is projected now is Sales Rs.350 Cr.;Production Rs.300 Cr. and 5500 units. Chargable CA
RM+SFG+FG+Consumables+Packageing material+ Debtors(=2mths sales) =Rs.510Cr.
Margin 25% and Credit purchase {=1.5 month of purchases (1100/12)*1.5}is =Rs137Cr.
Hence
1)Drawing Limit= 510 - (128+137)
=Rs.245Cr.
2) Limit sanctioned Rs,250 Cr.
OPERATIVE LIMITS
Sanctioned for the ensuing Quarter will be lesser of 1 or 2 ie Rs.245Cr.
DK and SR were delighted and said what a fantastic tool in the hands of a Banker to Monitor the account. effectively.
Sir is it necessary to submit MSOD and Monthly Statements of Stock and Debtors. Surely they are as they give us micro information.
Shri Nagpal left them for attending Credit Monitoring meet but with an assurance to come back tomorrow on the same subject.
Thanks Sir.
@ Rate the lesson on the Scale of
1 Highest. to 4- Lowest .
Waman Gokhale
7350901500
waman.gokhale@gmail.com
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