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Business Finance

Bank Credit & CMA Report Preparation

CA-prepared Credit Monitoring Arrangement (CMA) data for bank loans — 3-year historical and 2-year projected financials, DSCR, TOL/TNW, current ratio, and banker-specific annexures for cash credit, overdraft, and term loans, in the RBI/IBA CMA data format.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineBank Credit / CMA

CA-prepared CMA data in the RBI/IBA format for CC/OD/TL proposals — 3-year historical + 2-year projected financials, DSCR (≥1.25), TOL/TNW, current ratio, fund flow, and banker-specific annexures, certified and bank-ready.

What is included
  • • 3-year historical + 2-year projected P&L, balance sheet, and cash flow
  • • Working-capital assessment — current assets/liabilities, DSCR, TOL/TNW, current ratio
  • • Fund-flow statement reconciling sources and uses
  • • Banker-specific annexures for CC/OD/TL proposals
  • • Reconciliation of projections to audited financials
  • • Certification of the CMA data pack for the bank
Documents required
  • • 3 years of audited financial statements
  • • Latest trial balance and stock/creditor/debtor statements
  • • Existing loan and sanction letter details (if a renewal or enhancement)
  • • Business plan or order book for the projection period
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • RBI / IBA CMA data format (Credit Monitoring Arrangement)
  • • Section 143 of the Companies Act 2013 (audited financials as base data)
  • • Section 128 of the Companies Act 2013 (books of account used)
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Base

Pull the base financials

We take 3 years of audited financials and the latest trial balance and reconcile the working-capital position item by item.

Step 2Project

Build the projections

We build 2 years of projected P&L, balance sheet, and cash flow from your order book, capacity, and margin assumptions.

Step 3Ratios

Compute the ratios

We compute DSCR, TOL/TNW, current ratio, stock/debtor holding periods, and the fund-flow statement in the RBI/IBA format.

Step 4Annexures

Draft banker annexures

We prepare the bank's specific annexures — security coverage, margin, drawing power, and covenant tracking sheets.

Step 5Submit

Certify and submit

We certify the CMA data pack and support you in submission to the bank, answering the credit officer's queries as they come.

AEO summary

A CMA (Credit Monitoring Arrangement) report is the standard data format Indian banks use to assess working-capital and term-loan proposals. It contains 3 years of historical and 2 years of projected financials plus key ratios — DSCR (banks generally look for ≥1.25), TOL/TNW, current ratio, and a fund-flow statement. A CA prepares and certifies it; there is no government portal or fee — the bank consumes it.

What goes inside the CMA data pack

The CMA format (RBI/IBA) is built around the financial statements the company already produces: 3 years of audited P&L and balance sheet as the base, 2 years of projections on top, and a set of computed ratios and schedules in between. The working-capital statement breaks current assets and current liabilities into their components — stock, debtors, creditors, cash — so the bank can see exactly where the money sits. The fund-flow statement reconciles where profits, borrowings, and asset purchases came from and went.

The certification underlines the whole pack. The bank's credit committee treats the CMA as the company's own representation of its financial future, so the numbers must tie back to the audited financials and the projections must be supportable by the order book. That tie-back is exactly what a CA prepares and certifies.

  • • Base — 3 years audited financials, reconciled to the latest trial balance
  • • Projections — 2 years P&L, balance sheet, cash flow from order book and margins
  • • Ratios — DSCR ≥1.25 (term), TOL/TNW <2.5–3:1, current ratio ~1.33:1 (lender-set covenants)
  • • Working capital — MPBF computation and drawing-power schedule
  • • Certified by CA — credibility the credit committee accepts

Why the CMA decides your sanction, not your story

A loan rejection is rarely about the business plan — it is almost always about the CMA ratios. DSCR below 1.25, TOL/TNW above 3:1, or a current ratio that doesn't cover the facility means the credit committee declines regardless of how good the story is. The CMA is the only structured data the bank sees, and it is the same format for every borrower, so the numbers speak first.

Preparing the CMA properly is also a discipline that pays beyond the bank: the same projected financials, ratios, and fund-flow logic are what investors, the credit-rating agencies, and the company's own board review. A bankable CMA is a bankable company on paper.

  • • DSCR ≥1.25 — the single most-checked term-loan covenant (confirm in your sanction letter)
  • • TOL/TNW — working-capital leverage ceiling, typically 2.5–3:1
  • • MPBF — maximum permissible bank finance drives the CC/OD limit
  • • Same data reused — investors, rating agencies, and board see the same pack

Government fees

Fee breakdown

ItemFeeNotes
CMA preparation and certificationDiscuss with usProfessional fee — the CMA is a bank document, not a government filing.
Bank processing chargesAs per the bank's scheduleLevied by the lending bank on sanction; varies by bank and facility.

Timeline

Typical turnaround

Typical timeline usually means a 1–2 weeks from financials turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

Professional fee for preparation and certification; no government fee for the CMA itself.

Related services

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Business Finance Hub

Bank credit (CMA), project finance DPR, working capital structuring, NCD issuance, and credit rating advisory.

Project Finance DPR

Detailed Project Report for term loans — cost, means of finance, and viability analysis.

Credit Rating Advisory

Data preparation for CRISIL/ICRA/CARE/India Ratings and alignment with rating criteria.

Invoice Discounting / TReDS

Invoice discounting via RBI-regulated TReDS — RXIL, M1xchange, Invoicemart.

FAQ

Frequently asked questions

What is a CMA report and why do banks ask for it?
The Credit Monitoring Arrangement (CMA) data is the standard format prescribed under the RBI/IBA working-capital assessment framework that banks use to judge a loan proposal. It shows 3 years of actuals and 2 years of projections — P&L, balance sheet, cash flow, working-capital position, and ratios like DSCR and TOL/TNW. Every cash-credit, overdraft, and term-loan proposal above a modest ticket size needs one.
What DSCR and TOL/TNW do banks look for?
For term loans, banks generally require a Debt Service Coverage Ratio (DSCR) of at least 1.25 — the projected cash available must cover principal and interest 1.25 times. For working capital, the TOL/TNW (total outside liabilities to tangible net worth) ratio is usually expected to stay below 2.5–3:1 for a healthy borrower, and the current ratio around 1.33:1. These are lender-set covenants, not statutory figures — the exact ratio your bank demands varies by lender and industry, so the CMA is built to the sanction letter's own test. The CMA must be built so these ratios come out bankable.
What is the working-capital assessment method?
Banks assess working-capital needs under the turnover method (a percentage of projected turnover, typically 20–25%) or the traditional current-asset/current-liability method, following the RBI's lending guidelines (the method in force for your bank's exposure is lender-specific). The CMA data feeds the computation of the maximum permissible bank finance (MPBF) and the drawing power against the cash-credit limit.
Can I prepare the CMA myself instead of using a CA?
You can, but the bank requires the CMA data to be certified by a chartered accountant — the certification is what makes the projection credible to the credit committee. The CA also reconciles the projections to audited financials and formats the data so the bank's system accepts it without back-and-forth. Preparing it wrong once costs you weeks of sanction delay; the certification cost is small by comparison.
What happens if the projected ratios don't meet the bank's norms?
The bank will either reduce the facility, ask for collateral to cover the shortfall, or decline the proposal. The fix is usually in the structure of the CMA rather than the business: stretching the projection period, reclassifying current vs non-current items, adding promoter contribution, or restructuring the debt into a longer tenor so the DSCR clears 1.25. We rebuild the CMA to the bank's norms before you submit, not after a rejection.
How long does a CMA report take?
With 3 years of audited financials and a realistic business plan, preparation and certification typically take 1–2 weeks. If the prior financials are unaudited or the stock/creditor schedules are missing, add time for reconciliation. The projection quality depends on your input — the order book, margins, and capacity plans you give us become the numbers the bank sees.

Canonical reference: https://www.pvtltd.co/services/bank-credit-cma-report

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