BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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10% of the Projected annual sales
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20% of the Projected Annual Gross Sales
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25% of the Projected annual sales
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20% of the Last years actual sales
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Detailed explanation-1: -As per Nayak Committee Report, working capital limits to SSI units is computed on the basis of minimum 20% of their estimated turnover up to credit limit of Rs. 5crore. For more details paragraph 4.12.
Detailed explanation-2: -Upto which amount working capital can be assessed and sanction under Nayak Committee/ Turnover method? The method is applicable for financing MSME units upto Rs. 5 crores and for others upto Rs. 2 crores.
Detailed explanation-3: -The P J Nayak Committee or officially the Committee to Review Governance of Boards of Banks in India was set up by the Reserve Bank of India (RBI) to review the governance of the board of banks in India. The Committee was set up in January 2014.
Detailed explanation-4: -As per this method, the working capital requirement is to be assessed at 25% of the projected turnover to be shared between the borrower and the bank, viz. borrower contributing 5% of the turnover as net working capital (NWC) and bank providing finance at a minimum of 20% of the turnover.