Drawing power

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AMITKUMAR RAMESHKUMAR JOSHI (Querist)
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23 June 2012 BOOK DEBT -200000, CREDITORS - 50000, AND STOCK -NIL.
WHILE CALCULATING DRAWING POWER WILL CREDITOR BE DEDUCTED?

Ishan Shah

Ishan Shah (Expert)
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24 June 2012 For calculating DP, we need to first of all refer to the sanction letter in which conditions mentioned by the bank relating to the book debts, creditors and stock based on which DP can be calculated. However, as far as concern to banks, generally all the banks are putting clause in the sanction letter itself that while calculating the DP, it should be reduced up to an amount of creditors.