Quick answer
What is CMA data?
CMA data, short for Credit Monitoring Arrangement data, is a bank's standard format of financial statements covering usually two or three past years, the current year estimate and projections. It includes an operating statement, balance sheet analysis, working capital comparison, MPBF computation and fund flow, and banks use it to set and review loan limits.
- Six standard forms, layouts vary slightly by bank
- Past figures must match audited accounts
- Banks test current ratio, DSCR and TOL/TNW
- Projections are estimates, not certified facts
What is CMA data and when do banks ask for it?
Banks ask for CMA data when a business applies for a new cash credit, overdraft or term loan, asks for an enhancement, or comes up for annual renewal. It lets the credit team compare your history and plans in one fixed layout, rather than reading differently drawn-up accounts from every borrower.
For a Wazirpur steel processor or an Okhla garment exporter, the CMA report is often the single document that decides whether a ₹2 crore cash credit becomes ₹3 crore. It typically covers two or three audited years, the current year's estimate and one to five projected years, with the number of years set by the bank and the loan tenure. Smaller loans may need only a simpler projection, which our page on the project report for a bank loan covers.
Where did the CMA format come from?
The Credit Monitoring Arrangement replaced the Reserve Bank of India's Credit Authorisation Scheme in 1988; under the older scheme, large loans needed RBI's prior approval. RBI later withdrew its mandatory lending norm for working capital in April 1997 and left assessment to each bank's board, but banks kept the CMA layout.
That history explains two things borrowers notice. First, the forms still use the language of the 1970s Tandon group, such as maximum permissible bank finance. Second, every bank now has its own variation, so the same business may fill slightly different templates for two lenders. Always ask the branch for its current template before you start.
History summarised from secondary sources, including a Lok Sabha answer cited in them. The bank's own credit policy is what applies to your loan.
Need help with CMA data preparation for bank loans? Talk to a chartered accountant in Delhi today. First call is free.
What are the six forms in the CMA data format?
The CMA data format has six core forms: existing and proposed limits, operating statement, analysis of balance sheet, comparative statement of current assets and liabilities, computation of maximum permissible bank finance, and fund flow. Some banks add a seventh sheet summarising key ratios.
| Form | Name | What it shows |
|---|---|---|
| I | Particulars of existing and proposed limits | Every fund-based and non-fund-based facility from all banks, current use and the limits now requested |
| II | Operating statement | Sales, cost of sales, interest, depreciation and profit for past, current and projected years |
| III | Analysis of balance sheet | Liabilities and assets regrouped into the bank's categories, including net worth and term liabilities |
| IV | Comparative statement of current assets and current liabilities | Holding levels of stock, debtors and creditors in months, which drive working capital need |
| V | Computation of maximum permissible bank finance (MPBF) | Working capital gap and the share the borrower must fund from long-term sources |
| VI | Fund flow statement | Long-term and short-term sources and uses of funds for each year |
Form names as commonly used by Indian banks; layouts and any extra sheets vary by lender. Ask your branch for its template.
Which ratios do banks check in a CMA report for bank loan?
Banks read a CMA report for bank loan purposes mainly through the current ratio, debt service coverage ratio (DSCR), total outside liabilities to tangible net worth (TOL/TNW), debt to EBITDA, and holding periods for stock and debtors. Each bank sets its own acceptable levels by sector and loan type.
RBI defined these ratios precisely in a September 2020 circular on resolution plans, and the definitions match how banks compute them in CMA analysis. That circular set minimums only for restructured accounts, so do not treat its thresholds as general lending norms.
| Ratio | How it is worked out | Why the bank cares |
|---|---|---|
| Current ratio | Current assets divided by current liabilities | Short-term liquidity and the margin you bring for working capital |
| DSCR | Net cash accruals plus interest and finance charges, divided by the current portion of long-term debt plus interest and finance charges | Whether yearly cash covers instalments and interest |
| Average DSCR | The same calculation averaged over the loan period | Repayment comfort across the tenure |
| TOL/ATNW | Long-term debt, short-term debt, current liabilities and provisions and deferred tax liability, divided by tangible net worth net of investments in and loans to group and outside entities | How much outsiders fund compared with owners |
| Total debt / EBITDA | Short-term plus long-term debt divided by profit before tax, interest, depreciation and amortisation | Years of earnings needed to repay debt |
Definitions from RBI circular RBI/2020-21/34, 7 September 2020. In that framework the current ratio and DSCR had to be 1.0 or above and average DSCR 1.2 or above; banks apply their own norms for new loans. Checked October 2026.
How do banks size a working capital limit from CMA data?
Banks use either a holding-period method, which builds the working capital gap from stock, debtor and creditor days in Forms IV and V, or, for smaller MSME borrowers, a turnover method that sets the limit as a share of projected annual sales. Which method applies depends on the bank's policy and the size of the limit.
- Holding-period (MPBF) method. The bank adds up current assets at your projected holding levels, deducts current liabilities other than bank borrowing, and asks you to fund part of the gap from long-term money. Under the widely used second method, your margin is 25% of total current assets.
- Turnover method. Bank MSME policies, following the Nayak Committee, commonly assess working capital up to ₹5 crore at 25% of projected turnover, with the bank funding at least 20% and the borrower 5%. Check the current figures in your bank's MSME policy and RBI's Master Direction on lending to the MSME sector.
- Cash budget. Seasonal businesses and contractors are sometimes assessed on monthly cash budgets instead.
If your unit is registered under Udyam, keep the certificate ready, since MSME classification affects which policy the bank applies. Our page on MSME registration explains the current limits.
What documents are needed to prepare CMA data?
To prepare CMA data you need audited financial statements for the last two or three years, provisional figures for the current year, current loan sanction letters and statements, stock and debtor details, GST returns and the assumptions behind your projections.
| Document | Used for |
|---|---|
| Audited balance sheets and profit and loss, last 2 to 3 years | Past columns of Forms II and III |
| Tax audit report and ITR acknowledgements | Cross-check of turnover and profit |
| Provisional accounts for the current year | Current-year estimate |
| Sanction letters and loan statements from all lenders | Form I and debt schedules |
| Monthly stock and book debt statements | Holding levels in Form IV |
| Ageing of debtors and creditors | Realistic holding periods |
| GST returns for recent months | Supports current sales run rate |
| Order book, capacity and price assumptions | Basis for projected sales |
| Quotations for any new machinery or premises | Term loan and capital expenditure columns |
Banks may ask for more, such as Udyam registration, KYC of promoters and property papers for security.
How is CMA data prepared, step by step?
A good CMA report starts from audited numbers, regroups them into the bank's categories, builds projections from a small set of written assumptions, and checks that the ratios and the requested limit tell one consistent story before anything goes to the branch.
- 1
Get the bank's template
Ask the branch or relationship manager for its current CMA format and the number of projected years required.
- 2
Regroup audited figures
Map past balance sheets into the bank's headings, for example treating partners' or directors' loans as the bank requires.
- 3
Agree the assumptions
Fix projected sales growth, margins, holding periods, capital expenditure and repayments, and write each one down.
- 4
Build the projections
Prepare the operating statement, balance sheet and fund flow, making sure the balance sheet balances every year.
- 5
Compute limits and ratios
Work out the working capital gap, MPBF or turnover-based limit, current ratio, DSCR and TOL/TNW.
- 6
Review and submit
Check every past figure against audited accounts, then submit with a short note explaining the assumptions.
Common mistakes in CMA data
The errors that slow sanctions are past figures that do not match audited accounts, projected sales growth with no basis, holding periods far better than history, a requested limit that the CMA itself does not support, and a balance sheet that does not balance in the projected years.
- Showing debtor days of 30 when the last audit shows 75.
- Projecting profit margins well above any past year without explaining why.
- Leaving out a term loan from another bank in Form I.
- Classifying unsecured loans from relatives as net worth without the bank's agreement.
- Ignoring stock statements already filed with the bank, which the bank will compare.
Banks often verify stock through a stock audit, so keep CMA holding levels close to what your stock statements show. Monthly books maintained on time, for example through accounting and bookkeeping services, remove most of these problems at the source.
Who prepares CMA data, and which listed firms can help?
CMA data is not reserved for chartered accountants: the borrower is responsible for it, and an accountant, financial adviser or in-house finance team can prepare it. Under the Chartered Accountants Act a CA may not vouch for the accuracy of a forecast, so projections are presented as estimates based on stated assumptions.
Among the firms on CA in Delhi, Moneymji lists business plans and financial modelling as part of its transaction advisory work, and Greenwolf Advisors, an advisory firm and not a CA firm, lists virtual CFO advisory and MIS dashboards, which help keep the numbers behind a CMA current through the year. Whoever you choose, you get a fixed quote for the agreed scope before work starts. See all listed firms in the Delhi CA firms directory, or read CA in Wazirpur if your unit is in the industrial area.
Frequently asked questions
What is the full form of CMA in CMA data?
CMA stands for Credit Monitoring Arrangement, the system banks adopted in 1988 to replace RBI's Credit Authorisation Scheme. The name stuck to the standard set of forms that borrowers fill, even though RBI no longer prescribes a mandatory working capital method.
Is CMA data mandatory for every bank loan?
No. It depends on the bank's credit policy, the type of facility and the amount. Working capital limits and larger term loans usually need it; small loans may need only a simple projection or a scheme-specific application. Ask the branch which format applies to your loan.
How many years of projections does CMA data need?
Usually two or three past audited years, the current year's estimate and projections for at least the next year. Term loans often need projections covering the whole repayment period. The bank sets the exact number in its template.
What is a good DSCR for a bank loan?
There is no single figure. Each bank sets its own comfort level by sector and loan. As a reference point, RBI's 2020 resolution framework required DSCR of at least 1.0 and average DSCR of at least 1.2 for restructured loans; lenders usually expect more cushion for new lending.
What is MPBF in CMA data?
Maximum permissible bank finance is the part of your working capital gap the bank is willing to fund. Under the second method that many banks still use, you bring a margin of 25% of total current assets from long-term sources and the bank funds the rest of the gap, subject to its policy.
Can a CA certify CMA data?
A CA can certify past figures that match audited records. For projections, ICAI rules bar a CA from vouching for the accuracy of a forecast, so the projections are presented as management estimates on stated assumptions, sometimes with a compilation or review note.
What is the difference between CMA data and a project report?
CMA data is the bank's standard tabular format focused on working capital and ratios. A project report describes a new venture or expansion in words and numbers: the promoter, product, market, costs and projections. Many term loans need both.
Why do banks reject CMA data?
Common reasons are figures that differ from audited accounts or GST returns, unrealistic growth, holding periods better than history, missing loans from other lenders, and a requested limit higher than the CMA calculation supports.
How long does it take to prepare CMA data?
With audited accounts and provisional figures ready, preparation usually takes a few working days, mostly spent agreeing assumptions. Missing accounts or unreconciled stock figures are what stretch the timeline.