Bank Credit Limit Increase Letter

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

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

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

The above format is also available here for download in Word Format


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