The Reserve Bank of India provides working capital financing through CMAs, or credit monitoring arrangements. Applicants must provide the bank with information about their revenue, expenses, assets, and obligations in a particular format. CMA Report/CMA Data is the name given to this particular format.
It is a banker's critical evaluation of a loan applicant's projected and current financial statements. The goal of this statement, which uses CMA data—a systematic study of a borrower's working capital management—is to guarantee that both short- and long-term funds are being used for their intended purposes.
The applicant provides the bank with an audited P&L A/C and balance sheet of at least one year, estimates for the current year and projections for the next two years, a funds flow statement, a ratio analysis, a comparative statement of current assets and current liabilities, and a statement of the maximum amount of bank financing that is permitted. The number of years for which data is needed varies depending on the bank. Such data must be periodically submitted to the bank even after receiving financing.
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