Bank audit

Originally posted by : VINOD KUAMR
	1. WHAT IS THE RULES AND REGULATIONS TO CHECK THE STOCK STATEMENT/CASH CREDIT. eg:- agar kisi business man ko bank ne loan diya h on the basis of stock statement (phir hum kon-2 sa document check karege and limit kaise fixed karege?)

Cash credit , popularly known as CC limit  is provided mainly to individuals or business entities  engaged in manufacturing and /or trading merchandise goods. It is used as working capital and is repayable on demand. The cash credit facility is granted against the security of stocks, crops, book debts related to the business. Every bank is having its own sets of rules to sanction such limits are within a broad guidelines issued by the regulator. These are generally on ‘floating’ interest rate basis based on Bank’s base rate. It should ensure that drawings in the working capital accounts are covered by the adequacy of current assets, since current assets are first appropriated in times of distress.

Banks generally have own criteria to fix drawing power in respect of stock.
Find attached checklist for stock audit