Book debts may be excluded from cash-credit drawing power because they are aged, disputed, already assigned, unaccepted or otherwise ineligible under the sanction. The business should trace each excluded debtor to the underlying invoice and contractual borrowing-base rule.
RBI credit-facility requirements and the lender's sanctioned margin methodology distinguish gross sales debtors from eligible receivables. A receivable recorded in the financial accounts is not necessarily bank-eligible collateral.
By Monei Matters Editorial Desk · Source check: 28 October 2026
Method note: This guide was prepared with research assistance using the official sources listed below. No named human reviewer is claimed.
Understand the actual problem
Use an invoice waterfall: begin with gross debtor balances; remove balances exceeding the permitted age, disputed invoices, related-party or assigned exposures where excluded, and other sanction-specific ineligible items. Then apply the prescribed debtor margin. Preserve customer acceptance, delivery, credit notes and subsequent receipt evidence.
Evidence-to-issue reconciliation
| Verification area | Evidence or question |
|---|---|
| Debtor identity | Customer ledger and verified invoice numbers |
| Ageing | Invoice and due dates compared with eligibility cut-off |
| Disputes | Returned goods, quality claims, credit notes |
| Assignments | Factored, discounted or already charged receivables |
| Margin | Sanctioned margin applied after exclusions |
Worked illustration: how to approach the decision
Assume gross receivables are ₹25 lakh. After excluding ₹5 lakh overdue, ₹4 lakh disputed and ₹4 lakh ineligible for other supported reasons, ₹12 lakh remains eligible. With an illustrative 25% margin, receivable-based drawing power is ₹9 lakh. The result does not establish the full account drawing power without stock and other components.
Worked hypothetical only; it does not describe a real borrower, lender or property.
Prepare a focused lender-facing response
Prepare a debtor-by-debtor exception schedule and submit underlying acceptance and payment evidence for genuinely eligible invoices. If a buyer disputes quality, resolve that commercial issue separately rather than merely requesting the bank to ignore the dispute.
What should not be assumed
An invoice assigned or financed elsewhere should not be presented as unrestricted collateral twice. And a sales invoice is not by itself proof of an undisputed collectible debt.
Practical next step
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Disclaimer: This article provides general educational information about Indian lending and borrower-resolution processes. It is not personalised banking, valuation, accounting, financial, tax or legal advice. The relevant lender category, contractual wording, dates and verified facts may alter the result. No sanction, waiver, reversal, restructuring, settlement, stay, security release or favourable complaint outcome is promised.
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