HOW MUCH CASH CAN BE WITHDRAWN FROM CASH CREDIT ACCOUNT ?
IF THERE IS ANY LIMITATION PLEASE PROVIDE SOURCE OF YOUR ANSWER
2 Replies
Unmesh
(student)
(108 Points)
Replied 24 July 2020
Depending on your stock and receivables. There are two aspects that determine your withdrawal limit.
One is credit limit and second is DP (Drawing Power) which is on your stock and debtors figure you submit.
Drawing power will be calculated keeping certain margin % on stocks and debtors depending on banks. It very from Raw Materials, SIP and FG. Also for DP calculations outstanding for more than 90days is mostly not considered.
You can withdraw upto the amount as per credit limit sanctioned or DP whichever is less.
One is credit limit and second is DP (Drawing Power) which is on your stock and debtors figure you submit.
Drawing power will be calculated keeping certain margin % on stocks and debtors depending on banks. It very from Raw Materials, SIP and FG. Also for DP calculations outstanding for more than 90days is mostly not considered.
You can withdraw upto the amount as per credit limit sanctioned or DP whichever is less.
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