Drawing Power Calculator
Monthly CC Stock Statement — Instant DP Calculation
Enter your inventory, receivables ageing and creditor deductions to compute Drawing Power using RBI-prescribed Methods A, B or C. See the complete step-by-step breakdown — operative limit, available amount, and excess over DP.
Facility Config
Inventory (₹ Lakhs)
Deducted from stock under Methods B & C
Trade Receivables Ageing (₹ L)
Always excluded regardless of age bucket
| Stock Component | |
| Gross Inventory | L — |
| Less: Ineligible | L — |
| Less: Trade Creditors | L — |
| Eligible Paid Stock | L — |
| Less: 25% Margin | L — |
| DP from Stock | L — |
| Receivables Component | |
| Total Trade Receivables | L — |
| Less: Over 90 days | L — |
| Less: Excluded | L — |
| Eligible Receivables | L — |
| Less: 30% Margin | L — |
| DP from Receivables | L — |
| Drawing Power Summary | |
| Calculated DP | L — |
| Sanctioned Limit | L 50.00 |
| Operative Limit | L — |
| CC Outstanding | L — |
| Available Amount | L — |
All values in ₹ Lakhs. Debtors over 90 days are excluded. Verify against your sanction letter before submitting to the bank.
Save & track monthly statements
Create a free account to save stock statements, generate PDF reports, and track DP month-over-month across multiple CC accounts.
What is Drawing Power in a CC Account?
Drawing Power (DP) is the maximum amount a borrower can withdraw from a cash-credit (CC) account at any time. Unlike a term loan (fixed disbursement), a CC account is a revolving facility — the borrower can draw, repay, and redraw — but only up to the Drawing Power, not the entire sanctioned limit.
DP is recalculated every month when the borrower submits a stock statement. It depends on the value of eligible stock (inventory minus ineligible items and creditor deductions) and eligible receivables (trade debtors within the age limit, minus always-excluded items). The bank applies a margin (typically 25–40%) to reduce the financed value, protecting itself against stock valuation risk.
The Operative Limit is the lower of the calculated DP and the sanctioned CC limit. Even if stock levels are high, the borrower cannot draw more than the sanctioned limit.
DP Calculation Methods — Comparison
| Method | Formula | When used |
|---|---|---|
| Method A | (Gross − Margin) − Creditors | Older sanction letters; less common today |
| Method B | (Gross − Ineligible) × (1 − M%) − Creditors | Conservative; creditors deducted after margin |
| Method C ✓ | (Gross − Ineligible − Creditors) × (1 − M%) | Most common; RBI-recommended for WC loans |
Frequently Asked Questions
What is Drawing Power (DP) in a cash-credit account?
Drawing Power is the maximum amount you can withdraw from a CC account at any time. It is recalculated monthly based on the stock statement you submit to the bank. DP = DP from eligible stock + DP from eligible receivables, capped at the sanctioned CC limit.
What is the difference between Methods A, B and C?
Method A deducts creditors after applying the margin to gross stock. Method B deducts ineligible stock first, applies the margin, then deducts creditors. Method C (most common) deducts both ineligible stock and creditors first to get 'Paid Stock', then applies the margin. Method C gives a lower DP than A or B, making it more conservative.
Which receivables are eligible for Drawing Power?
Trade receivables within the age limit in your sanction letter (usually 90 days) are eligible. Related-party receivables, disputed bills, and bills discounted with the bank are always excluded. After excluding over-age and always-excluded items, a receivable margin (typically 30%) is deducted.
What happens if I draw more than the Drawing Power?
Drawing beyond DP creates an 'Excess over DP' situation. The bank may freeze further drawings, charge penal interest on the excess, and downgrade the account rating. Persistent excess over DP is an early warning signal under RBI guidelines.
What is the stock margin in a CC account?
The stock margin is the percentage of stock value that must be contributed by the borrower (own funds). If the margin is 25%, the bank finances 75% of eligible paid stock. The margin is specified in the sanction letter and reflects the risk perception of the bank.
How is the Operative Limit different from Drawing Power?
Calculated DP may exceed the sanctioned CC limit. The Operative Limit is the minimum of (a) Calculated DP and (b) Sanctioned CC Limit + Ad Hoc Limit. You cannot draw beyond the Operative Limit even if stock levels are very high.