 |
|
For business information, annual reports, laws, ordinances, regulations and articles. |
|
|
REGULATION-V
MAINTENANCE OF DEBT-EQUITY RATIO
Banks shall ensure that:--
(a) Current asset to current liability ratio of the borrower does not fall below the
minimum indicated hereunder:-
| (i) Upto 30-6-1998 |
0.9:1 |
| (ii) As from 306-1999 |
1:1 |
Current maturities of long term debt not yet due for payment may
be excluded from the current liabilities for the purpose of calculating these ratios.
Lease rental receivable within the next twelve months as disclosed in the notes to the
annual audited accounts shall be treated as current assets for the purpose of calculating
these ratios.
(b) Fresh/additional accommodation in the form of long term debts shall be provided on the
basis of a debt equity ratio not exceeding 60:40 provided the differential between
required & existing ratio is made good during the extended period i.e., upto 30th
June, 1999. Provided further that where a different debt equity ratio has been laid down
by the Government, the ratio laid down by Government shall apply.
(c) Loans to individual borrowers not exceeding Rs. 500,000/- per borrower shall be exempt
from the application of this regulation.
(d) For the purpose of this regulation sub-ordinated loans shall be
counted as equity.
