Drawing Power Calculator — Stock Statement DP (2026)

Calculate drawing power (DP) from a cash credit stock statement. Enter the sanctioned limit, eligible stock, book debts within 90 days, trade creditors and margin — the calculator shows the drawing power, the operative limit against your sanction, and whether the account is in-order or out-of-order against a given outstanding balance.

Drawing Power — Quick Facts

Formula: (Eligible Stock + Book Debts ≤90 days − Trade Creditors) × (1 − Margin%)
Standard margin: 25% for cash credit — so DP = Net Eligible Assets × 75%
Book debts cutoff: only receivables within 90 days of invoice date are eligible
Never exceeds sanction: the operative limit is always the lower of computed DP and the sanctioned CC limit
Out-of-order: outstanding balance exceeding the operative limit for 90 continuous days triggers NPA under RBI IRAC norms

🏦 Sanctioned Facility

Sanctioned Cash Credit Limit (₹)

📦 Eligible Stock (at cost or market price, whichever is lower)

Raw Material (₹)

Work-in-Progress / WIP (₹)

Finished Goods (₹)

🧾 Book Debts & Creditors

Book Debts within 90 days (₹) debts older than 90 days are not eligible

Trade Creditors for Goods (₹)

📐 Margin

Margin (%) Standard margin for cash credit is 25% — check your sanction letter for the actual rate

📊 Check Account Status (optional)

Current Outstanding Balance (₹)

Eligible Assets

Total Stock (Raw Material + WIP + Finished Goods)	—
+ Book Debts (≤90 days)	—
Total Eligible Assets	—
− Trade Creditors	—
Net Eligible Assets	—

Drawing Power

− Margin (25%)	—
Drawing Power (from stock statement)	—
Sanctioned Limit	—

Operative Limit — Lower of Drawing Power and Sanctioned Limit

Assumptions & sources. Formula: Drawing Power = (Eligible Stock + Book Debts ≤ 90 days − Trade Creditors) × (1 − Margin%), i.e. Net Eligible Assets × (1 − Margin%). Eligible stock is valued at cost or market price, whichever is lower, and only covers raw material, WIP and finished goods physically declared in the stock statement. Book debts older than 90 days from the invoice date are excluded entirely. The operative limit on any day is the lower of the computed Drawing Power and the sanctioned Cash Credit limit — DP can never exceed the sanction. Per RBI's Master Circular on Loans and Advances, stock statements are typically required monthly, by the 7th of the following month; non-submission may freeze DP at the last-declared level or reduce it to nil. Under RBI IRAC norms, an account is "out-of-order" when the outstanding balance continuously exceeds the operative limit — 90 consecutive days of this triggers NPA classification. This is a planning/training tool — verify the exact figure against your bank's own sanction terms and stock-statement format.

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How Drawing Power Is Calculated

1 Add eligible stock and book debts. Stock (raw material + WIP + finished goods, at cost or market price whichever is lower) plus book debts within 90 days of invoice date gives Total Eligible Assets.

2 Deduct trade creditors to get Net Eligible Assets — the bank should not finance goods that suppliers have already funded on credit.

3 Apply the margin — typically 25% for cash credit — to Net Eligible Assets. This is the borrower’s own stake; the bank finances the remaining 75%.

4 Cap at the sanctioned limit. The operative limit on any day is whichever is lower — the computed drawing power or the sanctioned Cash Credit limit. DP can never expand the sanction.

Read the full Drawing Power Formula & Calculation guide for the complete worked example, the stock-statement submission cycle, and how out-of-order accounts are handled under RBI IRAC norms.

Frequently Asked Questions — Drawing Power Calculator

What is the drawing power formula?

Drawing Power = (Eligible Stock + Book Debts up to 90 days − Trade Creditors) × (1 − Margin%). With the standard 25% margin used for cash credit accounts, this simplifies to DP = Net Eligible Assets × 75%, where Net Eligible Assets = Eligible Stock + Book Debts ≤ 90 days − Trade Creditors.

Can drawing power exceed the sanctioned cash credit limit?

No. The operative limit on any given day is always the lower of the computed drawing power and the sanctioned Cash Credit limit. Even if the stock statement shows eligible assets that would produce a higher DP, the borrower cannot draw beyond the sanctioned limit.

Which book debts are eligible for drawing power calculation?

Only book debts (receivables) within 90 days of the invoice date are eligible. Debts older than 90 days are excluded entirely from the drawing power calculation, since they are treated as not readily realisable.

Why are trade creditors deducted while calculating drawing power?

Trade creditors are deducted because that portion of the stock has already been financed by the supplier on credit terms, not by the bank. Deducting creditors before applying the margin avoids the bank double-financing goods the supplier has already funded.

What happens when the outstanding balance exceeds drawing power?

The cash credit account is classified as “out-of-order.” Under RBI’s Income Recognition and Asset Classification (IRAC) norms, if the outstanding balance continuously exceeds the drawing power (or sanctioned limit, whichever is lower) for 90 consecutive days, the account is downgraded to a Non-Performing Asset (NPA).

What is the standard margin used for drawing power calculation?

The standard margin for cash credit facilities is 25%, meaning the bank finances 75% of Net Eligible Assets. The actual margin percentage is set in the sanction letter and can vary by borrower, industry, and the bank’s credit policy — always check the specific sanction terms rather than assuming 25%.