Question
In the Tandon Committee Method 1, what is the maximum
permissible bank finance (MPBF) calculated as?Solution
The first method for calculating MPBF under the Tandon Committee approach involves subtracting 25% of the working capital gap (WCG) from the difference between current assets (CA) and other current liabilities (OCL). This method helps determine the proportion of working capital that the bank can finance.
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