Bank Stock Statement (Accounts)

Bank do need Stock Statement to ascertain the

Current Assets Position of the firm.

“Stock” should be calculated Item wise.

Items Purchased Less Items sold would be stock on hand.

The same, when multiplied by the Rate [in existence on any Relevant Day]

would give Value of Stock, which Bank would be Interested in knowing to.

Banks give loan on working capital and they have charge over your stock. For e.g. if you are given loan of say Rs.10.00 Lacs and the margin is say 25% then you should atleast have 12.50 Lacs of stock with you.

Where your stock position goes less than the amount specified you will not be eligible for the loan what you have availed with them.

In case you do not pay them, they have a right over your stock.

Stock valuation is not that simple as you have stated.

The most easiest thing to do would be to check the physical stock which you have and then value it at the market rates.

If physical inventory maintenance is not easy for you then you will have value it as follows

Opening Stock (COST) + Purchases - Sales (COST and not at the actual sales Price) = Closing Stock.

Originally posted by : praveen
	Banks give loan on working capital and they have charge over your stock. For e.g. if you are given loan of say Rs.10.00 Lacs and the margin is say 25% then you should atleast have 12.50 Lacs of stock with you. Where your stock position goes less than the amount specified you will not be eligible for the loan what you have availed with them. In case you do not pay them, they have a right over your stock. Stock valuation is not that simple as you have stated. The most easiest thing to do would be to check the physical stock which you have and then value it at the market rates. If physical inventory maintenance is not easy for you then you will have value it as follows Opening Stock (COST) + Purchases - Sales (COST and not at the actual sales Price) = Closing Stock.

Stock details are to be submitted into the format given by the bank.apart from stock details you need to give statement of a/c receivables and a/c parables.Creditors for material constitute unpaid stock which is to be deducted from stock.This constitutes your drawing power.

Drawing Power = Stock+Debtors-Creditors for stock.

DEAR EXPERTS, 
I need to submit bank stock statement every month to my banker, what is the importance of it.

How to calculate and show it 
is it Purchase - sales = stock.
Suppose i have done 10 lakhs purchase and 5 lakhs sales then my stock will be 5 lacs or any other calucation is involved.....

Originally posted by : praveen
	Banks give loan on working capital and they have charge over your stock. For e.g. if you are given loan of say Rs. 10.00 Lacs and the margin is say 25% then you should atleast have 12.50 Lacs of stock with you. Where your stock position goes less than the amount specified you will not be eligible for the loan what you have availed with them. In case you do not pay them, they have a right over your stock. Stock valuation is not that simple as you have stated. The most easiest thing to do would be to check the physical stock which you have and then value it at the market rates. If physical inventory maintenance is not easy for you then you will have value it as follows Opening Stock (COST) + Purchases - Sales (COST and not at the actual sales Price) = Closing Stock.

sir, for Rs. 10.00 Lacs working capital (Cash Credit) Limit you have must stock of Rs. 13.33 lakh this is a 25% margin. (10/75*100)

I Have a Cash Credit Loan of limit 4 lacs..for that how much stock is neccessary with me..?

Originally posted by : Aamir Islam
	I Have a Cash Credit Loan of limit 4 lacs..for that how much stock is neccessary with me..?

The usual norms of the bank is to give loan on a specific margin limit. The margin is the percentage of over the amount of loan for the value of which stock is to be maintained. The percentage of Margin varies from bank to bank. But usually the Margin is near about 10%.

So if CC limit is 4 lakhs, then stock amount should be 4 lakhs * 110% = 4.4 lakhs i.e. 4,40,000/-

DEAR EXPERTS,

 I need to submit  sbi bank stock statement every month to my banker, what is the importance of it. How to calculate ( CC 10 CRORE } and show it  is it Purchase - sales = stock...... 

Please let me known CA certified stock is required for all CC loans with limit of Rs. 5lacs also or is there any limit for the same. 

CA certified

Please let me known CA certified stock is required for all CC loans with limit of Rs. 5lacs also or is there any limit for the same. 

CA certified

If supposedly I have much lesser stock than the limit than what actions are taken by the bank.