Why Does a Bank Ask for a Monthly Stock Statement for Cash Credit?
Quick Answer A bank asks for a monthly stock statement because a cash credit limit is secured by your current assets, mainly stock and receivables, which change every month. The statement shows the current value of these assets so the bank can check the security cover, work out your drawing power , and monitor whether the limit is being used properly. Frequency and format are set in your sanction terms. Introduction Many owners are surprised when the bank asks for a stock statement every month after a CC limit is sanctioned. It feels like extra paperwork. But a CC account is different from a term loan: the balance goes up and down daily, and the security behind it is also moving. The stock statement is how the bank keeps track of that security. Understanding its purpose makes it easier to prepare correctly and avoid problems with your limit. At Sharda Associates , we prepare CA-certified project reports, CMA data and DPRs , and handle bank documentation for MSME and government scheme l...
