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Debt Service Coverage Ratio

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(Querist)
13 October 2010 We have to submit renewal propsal for TL and CC facility to our bankers for renewal. I have certain queries, and for your view's I shall be ever grateful
1. How much is benchmark Gross Av. DSCR, and what is the lowest acceptable GA DSCR for SBI. Will 1.10 do?
2. Inspite of low DSCR, TL obligations will be fulfilled from capital introductions. Earlier also, capital has been infused and there is no major default in repayment. Is this acceptable to bank?
3. Whether current ratio of 1.05 suffice or it has to be atleast 1.20.
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CA Pramod Jain

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CA Pramod Jain (Expert)
13 October 2010 1. 1.10 is really low it shud be more then 2 at least.
2. DSCR is mainly for servicing of debt from cash accruals, so it has to be good.
3. SBI needs current ratio more then 1.26.
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