India · Tools
Drawing power.
Banks recompute how much you can draw every month from your stock statement, not your sanctioned limit. See your drawing power, and what actually constrains it, in seconds.
Your stock statement
Raw material, work-in-progress and finished goods on your books.
Trade payables for that stock. Subtracted so supplier-funded stock isn't financed twice.
Book debts within the bank's eligible age. Older debtors are usually excluded.
Margins are the bank's cushion against price falls and bad debts. 25% on stock and 40% on debtors are common; your sanction letter sets the exact figures.
If you enter your limit, we show how much you can actually draw this month.
Drawing power
Monthly drawing power
25% stock margin · 40% debtor margin
Paid stock
₹35,00,000
Stock less creditors
Eligible debtors
₹30,00,000
Within 90 days
Need a higher limit?
This is the textbook figure. Your real drawing power is often higher, or structured differently, and this calculator can't see that.
Packing credit, bill discounting or factoring, LC-backed (unpaid) stock, and export incentives all change the number. We structure working-capital lines and invoice factoring so you draw more against the same business.
Indicative figure. Banks differ on margins, the eligible age of debtors, treatment of LC-backed creditors, and whether DP is computed gross or net of creditors. Your sanction letter and monthly stock-statement format are the final word. Confirm with your bank before relying on this.
How drawing power works
Your limit is the ceiling. Your stock sets the floor.
A cash-credit account has two numbers. The sanctioned limit is fixed when the facility is approved. Drawing power is recomputed every month from the stock statement you submit, and you can draw only up to the lower of the two.
Common questions
What is drawing power in a cash-credit account?
Drawing power (DP) is the maximum a bank lets you withdraw against a cash-credit or overdraft limit in a given month. Unlike the sanctioned limit, which is fixed at sanction, DP is recomputed every month from your stock statement, so it moves with your stock and receivables.
How is drawing power calculated?
The common method is: paid stock = closing stock minus sundry creditors; DP from stock = paid stock × (1 − stock margin); DP from debtors = eligible receivables × (1 − debtor margin); drawing power = the sum of the two. Creditors are subtracted so supplier-funded stock is not financed twice.
What is the difference between drawing power and the sanctioned limit?
The sanctioned limit is the ceiling the bank approved. Drawing power is the monthly cap based on your current assets. You can draw only up to the lower of the two. A healthy account often has DP close to, or above, the sanctioned limit.
What stock and debtor margins do banks use?
Margins are the bank's cushion against price falls and bad debts. 25% on stock and 40% on book debts are common starting points, but each bank sets its own in the sanction letter, and they vary by industry and borrower profile.