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Bank Credit Limit Increase Letter

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Bank Credit Limit Increase Letter Powered By Docstoc
					Sample / Template / Example / How to write a request letter to Bank
Manager (HDFC, SBI, ICICI, IDBI, PNB, HSBC etc) for Renewal &
Enhancement of Cash Credit (CC) limit in word/ .doc Format

RCL/SBI/13-14/
September 30, 2013

The General Manager
State Bank of India
L N Road
Mumbai – 458 545

Dear Sir,
                               Reg : Renewal of our Limit

We are presently enjoying following Fund Based and Non fund based Limits under
consortium arrangement with your leadership.
                                                                ( In Crores )
 Name of the Bank              Aggregate Limit % Fund Based Non – Fund Based
 STATE BANK OF INDIA                   100          50        100               100
 ICICI BANK                             50          25         50               50
 BOI                                    50          25         50               50
 TOTAL                                200.00        100     100.00            100.00


We have already submitted Audited Financial Result of our Company for the year ended
31st March, 2013 to you and have handed over our CMA Data on 29th July 2013 while
submitted our proposal for conversion of our CC Limit with you to FCNR (B) DL.

We would like to submit following few points in respect of Audited Result for the year
ended 31st March, 2013 of our Company.

The main reasons for lower PAT during March 2013, despite our improved operational
income, though undersigned explained to you, are as under :

1. The other income in March 2013 is less by Rs.15.00 Cr for lower sale of Seedling due
   to Gall disease. This Gall disease has affected globally and our plantation also
   affected with the said disease.

2. Input Cost of the Company increased for inflationary trend during the Ist half of
   2012-2013.

The Company could not pass the increased cost to its buyers because of Global
recession during the second half of 2012-2013, to avoid bad impact on Sales, However,
if you please scrutinize our financials for the year ended March 2013, you will find that
though our PAT in the current year ended March 2013 is lower than previous year, our
operational performance has improved and better than previous year.
                                                2012        2013
     Profit before Other Income               7000.00      6500.00
     Less other Income                        2000.00       500.00
     Income from Operation                    5000.00      6000.00
On the light of above if you scrutinize our performance for the year ended 2012-2013
you will find that our performance for the year 2012-2013 is alike to our performance for
the year ended 2011-2012 but due to lower other income in 2012-2013 the result is
unimpressive. We trust you will admit that the performance of the company is always
viewed keeping aside other income as it is not an operational income. This assessment
speaks about real operational strength of the Company which we have gained during
the year 2012-2013 over previous year.

Based on above facts, we have prepared our estimates for the Year 2013-2014 and
projections for the year 2014-2015 , a copy of which we have already handed over to
you on 29th July 2013.

However, we once again enclose herewith a copy of our CMA Data, and request you for
renewal of our limit with :

a)    Enhancement of Fund Bases limit to Rs.200 Crores ( with 25% interchangeability of
      Non Fund Based limit to Fund Based Limit)

b)    Non-Fund Based limit to Rs.200 Crores (Rs.180 Crores for Issue of LC & Rs. 20
      Crores for LC Discounting facility)

c)    Waiver of Margin for issue of Letter of Credit

d)    Charging Interest on Fund Based Limits at SBI PLR rate.

We offer following justification for enhancement.

1. The company have decided, to improve top line, to import Plyboard with thickness
   lower than 5mm to cater huge demand in local market. Our company has capacity of
   producing 6mm & below thickness Plywood, but it is not cost effective if we produce
   in our factory. So to tap vast local market having demand for lower thickness
   Plywood, our Company has already commenced importing Plywood from current
   financial year 2013-2014 for which we need at least Rs.200 Crores.

2. During the Current Financial Year 2013-2014, our production has already picked up
   and due to our endeavor we are procuring regular extra orders from , in and outside
   India. We have already despatched Fifty consignment to Middle East and to Africa
   for Rs.60000.00 lacs and another consignment for Africa is almost ready. Our export
   will further accelerate as these exports will continue and we are getting further
   enquiry from those places. We have achieved sales in local market upto August 2013
   to the tune of Rs. 3000 crores.
3. Hence to procure continuous flow of raw material, Import of Plyboard, to meet
   increased input cost with an ultimate aim of increase of profit by improving turnover
   we have made enclosed projected CMA Data and request you for renewal of our limit
   with enhancement to Rs.200 Crores .

Thanking you,

Yours faithfully,
For Rocket Sales Limited



Authorised Signatory

Encl. As above