Question

What does the concept of "Drawing Power" refer to in a Cash Credit facility?

Q: Answer-What does the concept of 'Drawing Power' refer to in a Cash Credit facility?

Drawing Power DP is the amount a borrower can withdraw from the sanctioned limit based on the current value of stock and receivables, adjusted by the banks margin policy

A The total amount of money a borrower can withdraw from the bank.

B The value of assets pledged by the borrower to secure the loan.

C The amount that a borrower can withdraw from the sanctioned credit limit based on the latest stock and receivables statement.

D The repayment schedule agreed upon for the loan.

E The total credit limit sanctioned by the bank to the borrower.

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What does the concept of "Drawing Power" refer to in a Cash Credit facility?

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