MPBF Method I & II

MPBF Method I and Method II in CMA

Learn how Maximum Permissible Bank Finance is assessed under Tandon Method I and Method II—and where Credlook shows it inside your CMA Working Capital section.

MPBF (Maximum Permissible Bank Finance) is a classic working-capital assessment concept used in many Indian bank CMA packs. Method I and Method II differ mainly in how minimum net working capital is stipulated.

Credlook calculates illustrative MPBF from the financials you enter. Final limits are decided by the lender.

Method I in brief

Minimum net working capital is often taken as 25% of the working capital gap. Assessed MPBF is typically WCG minus that minimum NWC (before circular bank-finance logic).

Method II in brief

Minimum NWC is often 25% of total current assets, implying a stronger current-ratio expectation (~1.33). Many banks emphasise Method II today.

Where to find MPBF in Credlook

• Open CMA → Working Capital (Form V)
• Compare MPBF with proposed CC / WC in Loan Details
• Review current ratio and CMA Summary gap notes

FAQ

Is MPBF the same as the limit the bank will sanction?

No. MPBF is an assessed ceiling from financials. Sanction depends on bank policy, security, and credit judgment.

Is MPBF configured in Settings?

No. Settings control units and years. MPBF appears under Working Capital after audited figures are available.

Open CMA Working Capital — Form V Method I, Method II, and turnover method from your statements.

Credlook.in provides project report and CMA documentation software from customer-provided details. We are not a bank, NBFC, lender, or government scheme authority.