bank od loan stock statement prepared drawing power procedure.

[Sundaraiah kollipara]

Sir, A business person rs:40 lacs received od loan from union bank of india Question: A person monthly stock statement report compulsory and rs:40 lacs od loan minimum stock value show in stock statement report drawing power procedure.

AI Summary

Borrower must submit monthly stock statements for ?40L overdraft; banks apply margins and recompute Drawing Power monthly A borrower with a ?40 lakh overdraft secured by stock must typically submit monthly stock statements showing inventory values used to calculate Drawing Power (DP); banks apply a margin (commonly 20-30%), so only a percentage of stock value counts toward DP (e.g., at a 25% margin, stock ˜ ?53.33 lakh yields ?40 lakh DP). DP is recomputed monthly and a fall in stock value can reduce available limits, trigger requirement to reduce outstanding exposure or provide additional security, and lead to penalties, account irregularity or freezing for non-submission; review the loan terms for specific margins and procedures.