Primary source: RBI Master Circular — Management of Advances – UCBs (DOR.CRE.REC.No.27/07.10.002/2023-24, 25 July 2023) · Dated 25 Oct 2026. Rates, schemes and circulars change — verify on the official page before you act.
Source: RBI Master Circular — Management of Advances – UCBs (25 July 2023). Related: working capital · WC renewal · WC limit calculator · CMA preparer.
Sanctioned limit vs drawing power
| Idea | What it means |
|---|---|
| Sanctioned limit | The top amount on your sanction letter |
| Drawing power | How much you can take this month from eligible stock and debtors |
| Outstanding / utilisation | How much you have already drawn |
You can usually draw only up to the lower of the limit and current drawing power, minus what you already owe.
How stock and debtors feed drawing power
- Paid stock the bank accepts
- Debtors within the age the bank allows
- Minus the bank’s margin
- Checks like insurance and how sales money comes in
Do not paste a generic formula into your pack unless that exact grid is on your sanction letter.
What to tidy before renewal
- Monthly stock and book-debt statements — current and matching your books
- Ageing of debtors and creditors
- Stock insurance naming the bank
- CMA / projections that match the same story (CMA preparer)
- Re-read the drawing-power clause on your sanction letter
Tools for rough maths only: working-capital limit calculator · EMI calculator.
Old MPBF / Tandon notes
If someone mentions “MPBF,” ask for the worksheet your bank will use this renewal. Your live file follows your sanction and the bank’s policy.
Contact if you want a file review.
Written and reviewed by CA Jitendraa Rathi, Chartered Accountant (CA membership number 217936) · Ex-banker, 20 years of experience in credit and lending · LinkedInLast reviewed · Expert review: CA Jitendraa Rathi (ICAI 217936)