Maximum Permissible Bank Finance (MPBF) method by Tandon Committee// Know it all
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The Maximum Permissible Bank Finance method also known as MPBF was recommended by Tandon Committee. This is a popular method of working capital assessment. In this video we discuss-
1. The difference between Turnover method and Maximum Permissible Bank Finance method(MPBF)
2. The process of working capital calculation/ assessment using Maximum Permissible Bank Finance method(MPBF)
3. Effect of Other Current Assets & Other Current Liabilities on your assessment of Maximum Permissible Bank Finance method(MPBF)
4. Effect of holding period/ operating cycle on your assessment of Maximum Permissible Bank Finance method(MPBF)
5. What to do in case MPBF falls short? Especially in the case of renewals.
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Waav excellent n needed vedio sir keep on posting .
Dear sir,when I stumbled across your channel on TH-cam.I felt like 'yes! This is exactly what I was looking for!'
Your videos are indeed fulfilling the thrust of the technical backgrounders who really want to become pro in banking.🙏
Can you elaborate on
1) actual working capital
2) minimum net working capital for business
And what's the difference between Actual WC and minimum WC
Please do reply sir
Eagerly waiting for your explanation on this.
Regards
Thank you.
We recommend that you watch our videos on NWC, Fund Flow and operating cycle.
You can get them in this playlist.
th-cam.com/play/PL8luW2QdVFksukofD75d9GhXBhHuO3Zra.html
We think you will get an answer. If you doubt persists feel free to write us at shuddhdesibanking@gmail.com. We also have a facebook page facebook.com/shuddhdesibanking which is linked to our whatsapp.
Sir great initiative.. This is so helpful for beginners.. Thank you so much🙏🏻
Thanks and welcome
Wow! Sir this is one video which must be shown to all Corporate bankers. Half of the appraising officers are not aware of the nitty gritties mentioned by you. This understanding of 2nd method of lending is not available in any rule book. Thanks for sharing!
We are glad that you liked it. Most of our videos are product of extensive research and work experience.
Help us reach like minded people who are interested in such contents.
Thank you once again.
@@ShuddhDesiBanking Sure Sir! Shared it across to the right target audience!🙏
😊😊😊😊😊
Thank you so much sir...... Very very good video.
Most welcome
Your videos are very good... Simple
Glad you like them! Help us reach like minded people.
Sir plz make video on each type of loan like housing car harvester kcc etc etc from bankers point of view.... N also on follow process.
Lv ur channel
Please explain NWC concept & its calculations in detail ..
Also how nwc is long term source ?
How is it diff from pmb ?
We will do a detailed video on NWC and cover everything you want to know. Till then share our channel and help us reach more people :)
@@ShuddhDesiBanking sure
Thanks
Sir very informative video. How do we calculate the holding period and holding level and also the debtor realization period from the Financials submitted. Kindly make a video with example of the same and comparison of projected figures with audited ones.
Most of the things already covered. Kindly see the working capital playlist.
Sir very well explained, Please also tell how to calculate NWC.
We will do a detailed video on NWC and cover everything you want to know. Till then share our channel and help us reach more people :)
For 1st method simply we can say MPBF1= 75% of WCG
Sir well explain. please make a video on sensitivity analysis perspective of bank proposal
Will do.
Please help me my balance sheet current assets are too High then current liabilities so this gives High NWC
CA - 2300000, CL 130000/-
networking Capital comes around- 2170000/- now I have to renew limit of Rs 200000/- not able to calculate Limit Under MPBF method
Nicely explain
Thanks and welcome
Whether the CC already provided by the other bank reflecting in the B/s should be deducted for NWC
Yes.
Sir if WCTL is of less than 12 months tenor, then will it be considered as restructuring and what will be the asset classification of such restructured accounts ?
Sir, please make a presentation on analysis of credit debit summations in a loan account
Suggestions are welcome. We will add it up in the list.
Very good content
Thank you. That means a lot.
Great
Glad it was helpful.
Sir how is the Operating cycle affecting the limit assessment apart from the fact that we can comment on the liquidity position of the firm ?
Working capital limits are assessed for full year. By the end of one operating cycle the current assets gets converted to cash. So company needs funding for one operating cycle only because at the end of this all its CA gets converted to cash and it can redeploy the cash for its next operating cycle.
Going by this principle if the operating cycle is small lets say one month, company will required less amount of working capital finance as compared to a company whose operating cycle is of 3 months. This is because for companies with smaller operating cycle, funds gets locked up for less number of days.
😊
Hello sir
Very helpful video but sir of nwc of a projected year comes out to be more than wcg.Does this means that subject is not eligible for CC LIMIT from bank?
Yes, correct
Excel sheet send karo
Sir, from where we can get this excel?
Sir how did you calculate/find Actual/projected NWC?
Take the current asset and current liability of project year. The difference will give you actual NWC. Never confuse this with the audited year. Actual NWC means the year which you are considering in your assessment.
@@ShuddhDesiBanking but nwc in most of d banks is not calculated like this ..
Please help us to understand how it calculated in your bank. Especially in the BSA excel you use for assessment.
@@ShuddhDesiBanking sir we want to take knowledge from you 😅..
Please be little bit slow while explaining . Your speed is very fast.
:) Thank you for an honest feedback. Will keep that in mind. The issue is as per our TH-cam statistics viewers drops out after a while which pushes us to complete the presentation in quick time. However that should not be a matter of inconvenience for our dedicated viewers. We will work on this.
U r employee of which bank... If u can share😬😬😬😬😬
Syndicate Bank. Now Canara Bank
424.75 how it is arrived?
Total Current asset - Total Current liability including bank borrowing
1447.72 - (535.29+487.70) = 424.75 lacs.
NWC is still confusing can we have one more video with calculation of NWC from CA -CL and by using (MIB+Long term Liability )- FA & L & Adv.
We already have one th-cam.com/video/P_d059w1kik/w-d-xo.html
MPBF ka 3rd method vi Janna hai ?
Not required for practical purpose. Might be useful for examination purpose.