Banking · Working Capital Assessment

Banks use various methods to assess the working capital needs of a business, ensuring that the borrower has sufficient liquidity to run day-to-day operations. The choice of method often depends on the size of the borrower and the nature of the industry. Statement I: The Nayak Committee recommended that for MSME units, the working capital limit should be assessed at a minimum of 20 percent of the projected annual turnover. Statement II: The Projected Turnover Method is generally used for borrowers with working capital limits up to ₹5 Crore from the banking system. Statement III: Under the Cash Budget Method, the credit limit is determined based on the maximum deficit shown in the monthly cash flow projections of the borrower. Considering the statements provided, which of the following is correct?