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(^442) Financial Management
TABLE 3
(8) As already discussed above, under the DBF-method, a Line of Credit (i.e., the
outer limit for entire working capital finance) shall be fixed, within which, the
borrowers shall be given freedom to select, for full one year or for a part of the
year, sub-limits in one or more out of the various existing types of credit facilities.
In other words, the line of credit is not a credit facility or credit delivery mode
per se, but, is an outer limit of total (funded and non-funded) working capital
finance, and within this outer limits, various existing types of working capital
funded and non-funded credit facilities with appropriate limits shall be made
available to the borrower at the discretion of the sanctioning authorities.
(9) RBI had advised that in the interest of developing ìbillsî culture in the system,
out of the total inland credit purchases of the borrowers, not less than 25%,
should be through bills drawn on them by concerned sellers. Accordingly, the
RBI had again urged to ensure that with effect from January 1, 1998, of the
total credit purchases of the borrowers, not less than 25 per cent, should be
through bills drawn on them by concerned sellers. The Committee supported
the above instruction fully.
(10) The Drawing power shall continue to be calculated with periodical statements
Forms Existing particulars
Nos
Proposed Particulars Remarks
I. Particulars of existing/
proposed limits from the
banking system
Particulars of existing/proposed
limits/facilities/finance from: (a)
each banks; (b) each financial
institution for working capital
credit requirement; (c) NRFCs;
(d) ICDs.
Applicable to all the
borrowers irrespective of the
size of the finance required.
II. Operating Statement Operating statement with
additional particulars required
under the DBF-method.
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III. Analysis of Balance
Sheet
Analysis of Balance Sheet with
additional particular required
under the DBF-method.
Operational guidelines and
the applicability criterion for
the
IV. Comparative statement
of Curren Assets and
Current Liabilities
Comparative Statement of
Current Assets and Current
Liabilities with additional
particulars required under DBF-
method.
various borrowers shall be
formulated separately in the
micro-level details and
guidelines/
V, Computation of MPBF
for Working Capital
Cash Budgets as required under
the DBF-method
instructions.
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VI. Funds Flow Statement Report on Financial indicators
as required under the DBF-
method.
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