CMA Report Preparation

Every bank loan above the discretion threshold — working capital, cash credit, term loan, project finance, LAP for business — passes through one mandatory document at the credit desk: the CMA report. Originally framed under the RBI's Credit Monitoring Arrangement guidelines for advances of ₹1 crore and above, the CMA has evolved into the universal language of bank credit appraisal in India. By 2026, every PSU bank, private bank, NBFC and small finance bank uses a CMA-format submission — sometimes on its own template (SBI CMA, HDFC CMA, ICICI CMA), sometimes on the borrower's — to assess past performance, projected viability, fund flow, working-capital build-up and ratio strength.

A weak CMA does not always get rejected outright — more often, it gets under-sanctioned. The borrower asks for ₹5 crore of working capital and gets ₹2.8 crore because the MPBF (Maximum Permissible Bank Finance) calculation under Tandon Method II shows a lower eligibility. Or the term loan asks for a 7-year tenor and gets 5 years because the projected DSCR in years 6-7 is below 1.25x. Or the proposal stalls at the credit committee because sensitivity analysis was not run on the most obvious risk variable. CMA preparation is not a formatting exercise — it is the document that sets the ceiling on how much, how long, and at what rate the borrower will get funded.

We prepare bank-ready CMA reports end-to-end — for new loan proposals, renewals, enhancements, takeovers and restructurings — aligned to the specific lender's template, RBI prudential norms, and the borrower's actual operating reality.

What's Inside a Bank-Ready CMA Report

Form I — Particulars of Existing & Proposed Limits:
Existing fund-based and non-fund-based limits, utilisation, conduct of account, proposed enhancement / restructure, security offered.

Form II — Operating Statement (Past 2-3 Years Audited + Current Provisional + 5-Year Projected):
Net sales, raw material, manufacturing expenses, gross profit, admin & selling, EBITDA, depreciation, interest, PBT, tax, PAT — with year-on-year growth rationale.

• Form III — Analysis of Balance Sheet:: Liabilities (capital, reserves, term loans, working-capital borrowings, sundry creditors, other current liabilities) and assets (fixed, investments, current assets, inventory, debtors, cash, loans & advances) — segregated into TNW, long-term sources / uses, current ratio composition.

• Form IV — Comparative Working Capital Build-Up:: Inventory holding (raw material, WIP, finished goods), debtors (domestic, export), other current assets, sundry creditors, other current liabilities — in days of cost or days of sales — to arrive at total current assets and current liabilities.

• Form V — MPBF Calculation (Tandon Method II):: Working-capital gap = current assets minus current liabilities (excl. bank borrowings); minus 25% margin from long-term sources; equals MPBF — the upper limit on the bank's working-capital exposure.

• Form VI — Fund Flow Statement:: Sources of funds (PAT, depreciation, term loan drawdown, equity infusion, increase in long-term liabilities) vs uses (capex, repayment, increase in working capital, dividend) — long-term sources covering long-term uses with comfortable surplus.

• Ratio Analysis:: DSCR (year-wise and average), current ratio, quick ratio, debt-equity, interest coverage, TOL/TNW, inventory turnover, debtor turnover, return on capital employed — benchmarked to industry and lender's internal scorecard.

• Sensitivity Analysis:: Stress-test on revenue (-10%, -15%), EBITDA margin (-200 bps, -300 bps), interest rate (+100 bps, +200 bps), receivables days (+15, +30) — DSCR and current ratio re-computed at each scenario.

• Lender-Specific Annexures:: SBI CMA template, HDFC credit memo format, ICICI scorecard inputs, PSU-bank narrative, NBFC project finance pack — chosen at the start so the credit officer reads it in their familiar layout.

Why Most Self-Prepared CMAs Get Under-Sanctioned or Returned

Projections that do not tie back to the audited base year. Inventory and debtor days assumed without industry benchmarking. MPBF computed on Method I when the bank uses Method II. DSCR shown only as an average, not year-wise. Sensitivity analysis missing — credit officer runs it themselves and prices in the worst case. Wrong template — credit team re-keys data and the proposal slows. RBI-driven asset classification (SMA-0, SMA-1, SMA-2, NPA) ignored when restructuring proposals are made. We close all of these at preparation, before the bank ever sees the file.

Special Cases We Handle

Greenfield Project Finance: Project cost, means of finance, debt-equity, moratorium, repayment schedule, year-wise DSCR, break-even, IRR, payback.
Takeover from Another Bank: Conduct certificate, no-dues, statement of account 12 months, reasons for takeover, comparative pricing.
Restructuring / OTR: RBI Resolution Framework alignment, viability study, sustainable vs unsustainable debt split, ICA where required.
NBFC & Small Finance Bank Proposals: Lighter format, faster turnaround, often higher pricing — CMA tuned to the lender's risk appetite.