BUISENESS MANAGEMENT
RISK MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
The minimum Net Working Capital under Projected Balance Sheet method should be?
|
|
25% of the total current assets
|
|
|
No minimum requirement, to be decided on case to case basis considering other parameters
|
|
|
25% of the limit sought by the customer
|
|
|
25% of the projected turnover
|
Explanation:
Detailed explanation-1: -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.
Detailed explanation-2: -Tandon’s-II method This method is also called as ‘second method’). In this method of lending, the borrower has to arrange 25% of Total Current Assets (TCA) as margin.
Detailed explanation-3: -The minimum paid-up equity capital for small finance banks shall be Rs. 100 crore.
There is 1 question to complete.