Bank loan

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Sankar Chakraborty (Querist)
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06 September 2011 Dear experts,

we have recd. sanction letter of loan 1.5 CRORE from bank details as under
facility Amt margin
cash credit(H) 75lac 25%
ODBD (BOOK DEBT) 75LAC 25%

pLEASE LET ,ME KNOW ABOUT MARGIN 25%

Hari Beldona

Hari Beldona (Expert)
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06 September 2011 To cover the risk of fall in prices of hypothecated stock and book debts to Bank (that realization of book debts may be doubtful or bad in case of few debtors) Hence bank deducts margin from the above:

Stock say Rs 12 lacs
Less: Margin 25% Rs 3 lacs
Drawing Power on stock Rs 9 lacs