Lecture 23: MPBF norms turnover method as suggested by Naik committee

[@himanshuvisbash9370]

I am into sales of Lap(TL) for last 4 years and currently shifted to working capital in one of reputed banks. Your videos are only lifeline for me as this is helping me to understand the things very clearly as there is noone to help in this world😢. You are doing a great stuff sir

[@AnkushJain]

Thank you

[@PoojaGupta-ko1qe]

Thanks sir your video really helpful 🙂🙂🙂

[@AnkushJain]

Your welcome

[@caarchanachoudhary]

I will have to finish your all videos in one week..Thanks 😊 you are helping me alot for my new assignment.

[@AnkushJain]

Your welcome 👍

[@sachitmakker6870]

Knowledge enhancing videos... Great job bro... Keep shinning

[@AnkushJain]

Thank you sachit.

[@dipakchoudhury4560]

Great content sir..keep making such videos 👍

[@AnkushJain]

Thank you

[@himanshugupta9709]

Thank You sir for sharing Your beautiful Knowledge .❤ I have a question about what is the need of these committees framework if the eligibility of limit is subject to drawing power calculation?

[@AnkushJain]

Drawing power is a check that post sanction limit utilisation remains in control

[@birjusaini8068]

Most amazing & knowledgeable videos Sir...🙏

[@AnkushJain]

Thank you 👍

[@hardikgala7703]

Hi Ankush, you are doing great job. Your videos are very knowledgeable

[@AnkushJain]

Thank you 👍

[@anuragpareek6121]

Thanks for this wonderful stuff🙏

[@AnkushJain]

Your welcome

[@HARSHSHARMA-mk4rx]

sir we can internally change department as I am working in sales in secured loans, can I internally move to credit department?

[@AnkushJain]

It is difficult to move from sales to credit internally also

[@TheSuresh2022]

Sir, turnover method me bhi working capital gap check karenge??

[@AnkushJain]

No just nwc or current ratio need to be positive

[@thakursumitsingh1426]

Question: Suppose we are going to fund on 26th Jan 22 and client has shared last 2 years Audited and an year of Provisional financial in which turnover are as follows - 2018-19 _ 162.52 lacs 2019-20 _ 161.97 lacs 2020-21_ 150.24 lacs (Provisional) And client is projecting to achieve 350 lacs in F.Y 21-22 and 437.50 lacs in F.Y 22-23 then which year of T.O we would have to consider for calculation? Provisional or projected or estimated?? Question 2 : Want to know about MIB and NWC role at the time of funding ?? Is NWC required to calculate for both products CC and OD ?

[@AnkushJain]

For question 1: You should fund on turnover of FY 21-22 considering that you will be having achievement details till date and you can easily project whether sales of 350 is achievable or not. Giving loan on sales of 437 is risky since this year is yet to come and you don't know how it will go. But there is a solution for this, if u r comfortable on client and want to fund him, then sanction loan basis 437 sales but for the time being release amount to be basis 350 sales only. Extra amount to be released say in July/aug month for fy 22-23 at which point you will be able to assess whether turnover is going in line with projection or not. If it is not in line then you can hold release of extra amount and you will be safe in your decision.

[@AnkushJain]

For question 2, cc or Od doesn't matter, you have to check NWC in every case

[@rahulwagh6070]

In TO method - how we stipulate minimum TBC requirement for customer ?

[@AnkushJain]

Based on balance sheet figure and current ratio maintenance

[@ankitgupta5583]

Working capital assessment video no kon sa hain.??

[@AnkushJain]

kzbin.info/aero/PLjlclsu02a_wGODIx5BJ7nBPt4IkpxhoA Here is the playlist

[@gajananade8269]

Great work sir 🙏👍👍

[@AnkushJain]

Thank you

[@gajananade8269]

Welcome sir 🤗

[@AnkushJain]

👍👍

[@atulvaidya9909]

Turnover assessment calculation as per my bank: 1) Projected annual turnover= 400 lakhs 2) Working capital requirement: 25% of projected turnover= 100 lakhs 3) Minimum margin required: 1/5 of working capital requirement= 20 lakhs 4) Actual margin available/ Net working capital available= 15 lakhs 5) 2)-3)= 80 lakhs 6) 2)-4)= 85 lakhs 7) 4 times of Actual margin available/ Net working capital available= 60 lakhs MPBF as per turnover method= minimum of 5),6),7)= 60 lakhs So please tell me whether it is right or wrong as per turnover method.

[@AnkushJain]

It is very detailed and correct

[@yjgratitude5]

Thank You sir

[@AnkushJain]

Your welcome

[@ManishaKumari-gq4lh]

Sir Digital and nondigital turnover wala concept v bata dijye 31.25 and 37.50 % wala concept

[@AnkushJain]

Vo Maine Kia nhi kbhi.. check kr luga

[@amanbhardwaj1000]

Sir, you subscriptions are shooting up like 🔥🔥...😄

[@AnkushJain]

Thank you 😊

[@poemsandwritings9115]

I have a question if promoter money is rs 5 and bank is funding 20 rs for sale of rs 25 then it is 80% bank is funding . Then how 20% of turnover is loan eligibility. Please guide

[@AnkushJain]

Sales is Rs. 100 not Rs. 25

[@SassyMeeh]

I finally understood actual mpbf concept of taking 25%. Thank you 😊. Have 1 question though - why some banks are calculating 18.75% of the expected turnover as mpbf calculation?

[@AnkushJain]

Can't say. Have never seen anyone doing it. Might be different bank have different take on promoter margin requirement

[@SassyMeeh]

Thanks Ankush👍 hoping to learn more

[@AnkushJain]

👍

[@prajwalsalunkhe6975]

Dear sir best guide plz tell on loan against property product detail information and how to it's calculate

[@AnkushJain]

I will make separate video series on it post completion of working capital series

[@rakeshgiri5515]

you great sir

[@AnkushJain]

Thank you

[@ashishijardar1334]

Sir ,if you can also make one series on balance sheet . This was awesome .

[@AnkushJain]

Yes, I will do it.

[@TheSuresh2022]

Agar client ka working capital gap negative hai, to kya hum use OD limit de sakte h??

[@AnkushJain]

No, ideally capital infusion krvana chahiye nahi to DOD de do ya WCTL

[@TheSuresh2022]

Sir, working capital gap is minus 10 lakh, then how much capital infusion required for COD of rs 50 lakh??

[@TheSuresh2022]

Can a borrower avail limit from two bank at a time??

[@AnkushJain]

Yes under multiple banking arrangement

[@gurpreetSingh-pz7bo]

Thanks...

[@AnkushJain]

Your welcome

[@RameshKumar-ou3oy]

Current ratio required 1 or ?

[@AnkushJain]

More than 1

[@aryankumar-hc4nc]

Depending on different types of methods ( tondon and naik )the limit is coming of 3cr but his DP is coming of 1cr. What will be the CC sanction limit?? Can Bank refuse to give sanction above the DP??? limit.

[@AnkushJain]

@@aryankumar-hc4nc yes bank can refuse

[@aryankumar-hc4nc]

Then what is the use of these formulas?? Despite this we can directly calculate DP which will be its CC limit

[@AnkushJain]

@@aryankumar-hc4nc DP is basically a control.. normally when MPBF is coming at 3 cr then there is hardly a chance that the dp shall be such low as on that date.. dp is for controlling post disbursement.. if client misused the funds for other purpose then the dp would fall and thereby bank can control excess usage or release of funds

[@aryankumar-hc4nc]

@@AnkushJain What percentage of MBPF should DP have?, and how to find fault if DP is lower side??

[@lovers7574]

Sir mortgage loan ka bhi detail video series laiye please

[@AnkushJain]

Home Loans, LAP and Mortgage underwriting course: kzbin.info/aero/PLjlclsu02a_w8vi8Hh-aSck_FD8c9QnBy

[@lovers7574]

@@AnkushJain thank you sir

[@AnkushJain]

@@lovers7574 your welcome

[@shivambajpay5072]

Sir is there any impact of creditors days in operating cycle?

[@AnkushJain]

Pl watch the video of operating cycle

[@Himanshu-bn9lw]

why bank use 31.25% of sales turnover while calculating eligibility as per turnover method? 25% of sales and 6.25% margin?

[@AnkushJain]

Have never seen bank using this. Can u explain with an example so that I can get to know it better

[@RahulGupta-jg2yf]

Sir how to make cash budget ?

[@AnkushJain]

Hi, are you asking about cash method of working capital assessment?

[@RahulGupta-jg2yf]

Yes sir

[@AnkushJain]

Ok will make video on it

[@RahulGupta-jg2yf]

Thanks sir and pls specify if any customer in consultancy services how to derive DP if he has debtors but not shown on books

[@AnkushJain]

Such cases should be proceeded with OD limit ideally

[@knowledgehub504]

Sir in later videos you have told that drawing power is seen only for cc limit. But here you are guiding that mpbf is subject to drawing power. Please clear my doubt🙏

[@AnkushJain]

Yes. This point is for cc limit only. If there is MPBF but no DP then you won't be able to use CC limit

[@knowledgehub504]

@@AnkushJain thank you sir

[@AnkushJain]

👍

[@TheSuresh2022]

Sir, in one of my case, turnover is 5 cr and according to turnover method eligibility comes near 1 cr, but working capital gap is only 40 lakh, So what is the actual eligibility for OD in that case??

[@AnkushJain]

1 crore

[@romilgupta6742]

Sir please make video on new method of turnover method for MSE borrowers based on digital and non digital turnover...Also kindly tell how can we identify the digital turnover from total turnover from balance sheet

[@AnkushJain]

Digital turnover you mean online sales?

[@romilgupta6742]

Sir it means turnover through digital mode like NEFT/RTGS or through UPI or any other digital mode but not in cash

[@AnkushJain]

@@romilgupta6742 it can be tracked from bank statement not balance sheet

[@MDVaashir]

Watched

[@AnkushJain]

👍

[@art_soul_words]

Question- If working capital is zero can we fund basis turnover method? Question 2 if customer is not eligible as per method 1 &II can we fund basis turnover method

[@AnkushJain]

Answer to both question is yes. Pl keep in mind that normally we use turnover method for small amount of funding only. For example around rs. 1 crore. One more thing to keep in mind that if u funding cc limit then client should be having drawing power for that. If I go by your question no. 2 if wc gap is not there or negative then client's DP will be not be sufficient. Then even if u sanction the limit basis turnover method still client will not be able to use it bcz of DP constraint. For more details, pl listen to the videos of type of working capital product and Drawing power detailed video.

[@rakeshgiri5515]

i am Rakesh Giri

[@AnkushJain]

Hi Rakesh

[@ayushjain6303]

👍👍👍

[@AnkushJain]

Thank you