CMA Data Format as per RBI Guidelines
— All 6 Forms Explained

History — The Tandon Committee & CMA Origins

The CMA Data format traces its roots to the Tandon Committee Report of 1974, commissioned by RBI to reform working capital lending practices in India. Before the Committee's recommendations, banks had no standardised method to assess how much working capital a business genuinely needed — lending was largely relationship-driven and often excessive.

The Committee, chaired by Shri P.L. Tandon (then CMD of Punjab National Bank), introduced:

• A prescribed format (6 forms) for all working capital credit assessments
• The MPBF concept — Maximum Permissible Bank Finance as a mathematical ceiling
• Three assessment methods (Methods 1, 2, and 3 — Method 3 was later discontinued)
• The principle that borrowers must fund at least 25% of their current assets from long-term sources

Over five decades later, the same 6-form CMA structure remains the industry standard across all Indian commercial banks, cooperative banks, and NBFCs for credit appraisal above ₹1 crore.

CMA Data Format — Overview

A complete RBI-compliant CMA submission consists of:

Form I — Particulars of Existing & Proposed Limits

Form I is the cover page of the CMA package. It does not contain financial projections but provides the context for the entire submission.

Mandatory Fields in Form I

• Name, constitution, and address of the borrower
• Nature of business / industry type
• Date of establishment and commencement of operations
• Bank and branch to which the proposal is submitted
• Existing credit facilities: type (CC/TL/LC/BG), limit, outstanding, bank's name
• Proposed facilities: type, amount, purpose, tenor
• Collateral security offered (primary and collateral)
• Associate / group concerns (to check cross-default risk)

Form II — Operating Statement (Profit & Loss)

Form II is the most scrutinised form. It is a reformatted P&L in RBI's prescribed line-item sequence. Key mandatory line items:

Form III — Balance Sheet

The projected Balance Sheet must be derived consistently from Form II projections. Key items:

Asset Side

• Gross Fixed Assets — Opening + Additions (capex plan)
• Accumulated Depreciation — Opening + Current year charge
• Net Fixed Assets (WDV) — GFA minus accumulated depreciation
• Capital Work in Progress (CWIP) — Assets under installation
• Investments — Long-term investments, FDs as margin money
• Current Assets — From Form IV (stocks, debtors, cash)

Liability Side

• Share Capital — Paid-up equity + preference
• Reserves & Surplus — Retained profits accumulated
• Term Loans — Opening balance minus repayments plus new drawdowns
• Working Capital Borrowings — CC/OD from bank (MPBF from Form V)
• Trade Creditors — From creditor days assumption
• Other Current Liabilities — Statutory dues, advances received

The Balance Sheet must balance (Total Assets = Total Liabilities + Net Worth) for every year. An imbalance means a formula or linkage error — the bank will return the submission.

Form IV — Current Assets & Current Liabilities

Form IV drives the MPBF calculation. It provides the detailed working capital build-up.

Current Assets (Working Capital)

• Raw Material and Stores Stock (days of consumption)
• Stock in Process / WIP (days of cost of production)
• Finished Goods Stock (days of cost of sales)
• Debtors / Receivables (days of net sales)
• Advance Payments to Suppliers
• Other Current Assets (prepaid, advance tax)
• Total Current Assets (TCA)

Current Liabilities (Other than Bank Borrowings)

• Trade Creditors (days of raw material purchase)
• Advance Payments from Customers
• Other Current Liabilities (statutory dues)
• Total Current Liabilities (excluding bank borrowings)

Form V — MPBF Calculation

Form V takes the TCA from Form IV and computes MPBF under both Methods:

Method 2 is more conservative — it explicitly requires that 25% of TCA be funded from the borrower's own long-term sources (Net Working Capital). Banks use Method 2 as the standard.

Form VI — Fund Flow Statement

Form VI shows movement of long-term funds — where money came from and where it was deployed, year by year.

Sources of Funds

• Net Profit After Tax
• Depreciation (non-cash, added back)
• Increase in Term Loan borrowings
• Increase in Share Capital or equity infusion
• Sale of assets or investments

Uses of Funds

• Capital expenditure (purchase/creation of fixed assets)
• Increase in Net Working Capital (NWC)
• Repayment of Term Loans
• Dividends paid to shareholders
• Increase in long-term investments

Sources must equal Uses in every year. A mismatch signals an accounting error. Banks also review whether capex is financed from appropriate long-term sources — not from short-term CC.

Additional Schedules — DSCR & Ratio Analysis

While not part of the original 6 RBI forms, these schedules are now universally required:

• DSCR Schedule — Year-wise table showing numerator, denominator, and DSCR for all repayment years. Required for any term loan component.
• Ratio Analysis — Banks compute 20+ ratios from Form II and III data. Key ratios: Current Ratio (≥1.33), DE Ratio, Net Profit Margin, ROCE, Inventory Turnover, Debtors Turnover.
• EMI Schedule — Principal and interest breakup for each repayment period — especially important for term loans with irregular repayment schedules.

Common Formatting Errors

• Balance Sheet doesn't balance — Most common error. Check net worth linkage from Form II to Form III.
• Depreciation basis mismatch — Using IT Act rates instead of Companies Act rates understates depreciation and overstates profit.
• Historical figures differ from audited accounts — Even a small difference will make the bank question the entire submission.
• WC interest included in DSCR formula — DSCR should use only TL interest in both numerator and denominator.
• Fund flow not balancing — Sources ≠ Uses means a missing item (often the change in NWC is computed incorrectly).
• Projection years inconsistent — P&L revenue growing but Balance Sheet fixed assets not matching any capex plan — raises red flags.

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