TL;DR
- A stock statement reports this month stock, debtors, and creditors. CMA data presents the multi-year plan the bank sanctioned against.
- The bank compares the two because the CMA is the promise and the stock statement is the proof.
- In the worked example, stock ran 22.5 percent above the CMA figure while annualised sales ran 10.0 percent below it.
- No RBI circular sets a variance tolerance band. A material gap earns questions, a drawing power cut, or a stock audit.
- File from your books, on the same cut-off monthly, and explain a known gap before the officer finds it.
Mehta Traders is a steel trading firm in Nagpur with a cash credit limit of Rs 250 lakh. In April, its CMA projected sales of Rs 12 crore for the year and a closing stock of Rs 200 lakh. In September, its stock statement showed stock of Rs 245 lakh, while six month sales annualised to only Rs 10.80 crore. The officer did not accuse the firm of anything. The officer asked one question: if sales are running below plan, why is stock running above plan. That question is the whole subject of this guide. It explains what goes in each document, why the bank compares them, which figures get cross-checked, and what a borrower should do when the two do not match.
One reading rule. This page is general information on Indian banking practice as of October 2026, not legal, tax, or loan advice. Where a rule comes from an RBI circular, this page says so. Where a practice comes from bank convention or a sanction letter, this page says that too, because margins, ageing cut-offs, and filing frequency vary by lender. Only your sanction letter and loan agreement bind your lender. This guide does not teach the full CMA format, drawing power math, or stock audit preparation. Those topics are linked where they touch this guide, and taught in their own guides.
What is a stock statement, and what goes in it?
A stock statement is a monthly or quarterly declaration of the current assets that secure a working capital limit. The borrower files it with the bank, usually for the previous month end, and the bank uses it to compute drawing power. It is a statement of fact about one date, not a plan. It answers a narrow question: what security do you hold today, and what do you owe against it.
A typical stock statement carries four blocks. First, stock in hand, split by category such as raw material, work in progress, and finished goods, with values as per the books. Second, book debts, split by age, because banks exclude debtors older than the ageing cut-off in the sanction letter. Third, creditors for stock, because unpaid suppliers already fund part of the stock and the bank will not fund the same stock twice. Fourth, the resulting drawing power working, which the bank computes after applying margins. Our drawing power guide teaches that computation in full, with the exclusions banks apply.
Filing discipline matters as much as accuracy. RBI asset-classification norms (IRAC Master Circular, para 4.2.4) require drawing power to rest on a current stock statement. A statement older than three months makes drawings irregular, and 90 continuous days of irregular drawings makes a working capital account a non-performing asset. That is an RBI consequence, not a bank preference. File on the due date in your sanction letter, from your books, on the same cut-off every month.
What is CMA data, and what goes in it?
CMA data, short for Credit Monitoring Arrangement data, is the structured set of financial statements a borrower submits when seeking, renewing, or enhancing a working capital or term loan facility. It presents two audited years, the current year estimate, and projections, usually in a five year view, so the bank can judge trend, reasonableness, and repayment capacity. It is a plan built on history, not a snapshot of one month. It answers a broad question: is this business viable, and how much finance does it genuinely need.
The classic format has six statements. The table below names them in one line each. The full format, with what the bank reads in each statement and why files get returned, is taught in our CMA data guide. This guide does not repeat that teaching. It uses the format only as the comparison side.
| CMA statement | What it carries | Why the cross-check needs it |
|---|---|---|
| I. Limits | Existing and proposed limits | Sets the cap the stock statement can never exceed |
| II. Operating statement | Sales, costs, and profit by year | Gives the sales plan actual sales are measured against |
| III. Balance sheet analysis | Assets, liabilities, and net worth by year | Gives the projected stock, debtor, and creditor levels |
| IV. Current assets and liabilities | Stock, debtors, and creditors with holding periods | The closest CMA cousin of the monthly stock statement |
| V. MPBF computation | Maximum permissible bank finance | Sets the assessed limit the sanction letter then fixes |
| VI. Fund flow statement | Sources and uses of funds by year | Shows whether long term funds are leaking into current assets |
Two history facts keep borrowers from overstating what CMA data is. The format traces to the Tandon Committee working capital norms of the 1970s, and the RBI withdrew the mandatory MPBF prescription in April 1997. Banks still ask for CMA data in this format by convention, and the sanction letter still governs each facility. CMA data is a bank assessment tool, not a statute. Our Tandon, Chore, and Nayak guide covers that history, and our CAM vs CMA vs project report guide explains how CMA data differs from the bank internal appraisal note.
How do the two documents differ at a glance?
The difference is purpose, period, and author. The stock statement is filed by the borrower every month to prove current security. CMA data is prepared by the borrower or its chartered accountant once a year to justify the limit. One looks at a date. The other looks at five years. Confusing the two is the most common borrower error in this area: borrowers polish the CMA at sanction and then file stock statements casually, as if the two were unrelated papers.
| Feature | Stock statement | CMA data |
|---|---|---|
| Purpose | Prove current security and set drawing power | Justify the limit and show repayment capacity |
| Period | One month end, actual figures | Five years, history plus estimate plus projections |
| Frequency | Monthly or quarterly, per the sanction letter | At sanction, renewal, or enhancement |
| Basis | Books of account on the statement date | Audited accounts plus assumptions for projections |
| Bank use | Monthly monitoring and drawing power | Sanction, limit sizing, and annual review |
| If it is wrong | Drawing power is wrong that month | The limit itself is sized on a wrong plan |
Why does the bank compare the stock statement with the CMA?
The bank compares them because the CMA is the only benchmark the bank has for what normal looks like in your business. The sanction was granted on projected sales, projected stock holding, and projected debtor days. The monthly stock statement is the first document that shows whether reality is tracking that plan. A stock statement that matches the books but drifts far from the CMA still tells the bank something important: either the plan was wrong, or the business has changed, or the statement needs a second look.
This comparison is also the cheapest early warning the bank owns. It costs no site visit and no audit fee. A rising stock figure against falling sales, a debtor book ageing past the sanctioned cut-off, or creditors collapsing while purchases continue each show up in a two page statement. That is why officers read the statement against the CMA before they read it against anything else. Our stock audit guide explains what happens when this monthly comparison triggers a full audit visit.
The comparison runs both ways. At renewal, the bank rebuilds the CMA on actuals, and a year of stock statements becomes the evidence for the new projections. A borrower who files careful monthly statements is, in effect, writing next year CMA with real numbers. A borrower who files careless statements arrives at renewal with no credible history to project from. The monthly paper is the annual paper, in instalments.
Which figures does the bank actually cross-check?
Five comparisons carry most of the weight. Each one pairs a CMA projection with a stock statement actual, and each gap has a distinct innocent explanation and a distinct worrying one. The officer job is to tell them apart, and the borrower job is to supply the explanation before being asked.
| Cross-check | CMA side | Stock statement side | What a gap can mean |
|---|---|---|---|
| Sales run-rate | Projected annual sales | Actual sales annualised from the year to date | Demand slowdown, delayed orders, or an optimistic CMA |
| Stock level | Projected closing stock and holding days | Actual stock and holding days at month end | Pile-up, seasonal build, or slow moving stock |
| Debtor ageing | Projected debtors and collection days | Actual debtors by age, with over-age split | Weak collections, disputed bills, or evergreening risk |
| Creditor level | Projected creditors | Actual creditors for stock | Supplier stretch, early payment, or purchase slowdown |
| Current ratio drift | Projected current assets and liabilities | Actual current assets and liabilities implied by the statement | Working capital stress the annual CMA cannot show |
Two comparisons matter more than the rest. Sales against stock is the first, because stock should broadly follow sales: when sales fall and stock rises, something is unsold, and the bank wants to know what. Debtors against creditors is the second, because the gap between what customers owe you and what you owe suppliers is the cash the bank is effectively funding. A file where both pairs drift the wrong way at once gets attention fast. Our bank statement guide shows how officers run the same cross-check habit on bank credits before they trust any other paper.
How much variance is too much?
No RBI circular sets a tolerance band for stock statement against CMA variance, and no bank publishes one as a rule. Any article that quotes a fixed band as a rule is inventing it. What exists instead is a practice: small variances with a clear cause pass quietly, large variances without a cause earn a query, and repeated large variances earn a limit action. The line between small and large depends on the business, the season, and the direction of the drift, not on a single number.
Direction matters more than size. A stock figure 20 percent above plan during a festival build, with orders in hand, reads differently from the same 20 percent during a sales slump, with no orders. Debtors 15 percent above plan because one large customer paid late reads differently from the same 15 percent spread across dozens of small overdue bills. Officers weigh the story, not just the percentage. That is why a variance note that names the cause, the amount, and the expected correction month closes queries faster than a corrected figure with no note.
One nearby number is often misquoted here, so keep it separate. Under the Companies (Auditor Report) Order, 2020, the auditor reports inventory discrepancies of 10 percent or more for each class, and for working capital limits above Rs 5 crore reports whether quarterly statements filed with banks agree with the books. That is an auditor reporting rule about books against statements. It is not a bank tolerance for statements against CMA projections. Do not cite it as permission for a 10 percent CMA gap, and do not let anyone cite it against you as a CMA rule.
The workbook in this guide uses its own flag levels to teach the habit: a variance beyond 10 percent gets a review flag, and a variance beyond 20 percent gets a written explanation flag. Those levels are the workbook own illustration, not a bank rule, and the workbook labels them as such. Use them to build the habit of explaining gaps early. Do not quote them to your bank as a standard.
What happens when the two do not match?
The response escalates in steps, and most borrowers only ever see the first two. Step one is a query: the branch asks for a reconciliation note or a revised statement. Step two is a drawing power adjustment: ineligible stock or over-age debtors come out of the computation, so the drawable amount falls even though the sanctioned limit is unchanged. Step three is a stock audit, where an external auditor verifies physical stock against books and statements. Step four is a limit hold or reduction at renewal, when the bank re-sizes the facility on actuals rather than on the old plan.
Two consequences catch borrowers by surprise. First, a drawing power cut is not a penalty and not a limit reduction. The limit stays, but the amount you can draw falls until eligible security rises again. Second, a stale stock statement has its own RBI consequence independent of variance: drawings against a statement older than three months are irregular, and 90 continuous days of irregular drawings makes the account a non-performing asset. A borrower who files late and files wrongly faces two separate problems, and fixing only one leaves the other open.
In serious cases, persistent divergence becomes an early warning signal under the RBI fraud risk framework, and the account can be red-flagged for deeper review. That end of the ladder is rare, and it follows a pattern of unexplained gaps, not one bad month. Our red flagged account guide explains that process, and our CMA rejections guide lists the ten mistakes that most often start the query cycle.
How do you keep the two consistent month after month?
Consistency is a routine, not a year end rescue. Run four habits every month, in the same order, and the CMA comparison largely takes care of itself. First, prepare the stock statement from the books, never from the previous statement or from memory. Second, use the same cut-off date as your GST returns, so sales, stock movement, and tax filings tell one story. Third, split debtors by age honestly, including the over-age column, because the bank excludes it anyway and hiding it only destroys trust. Fourth, attach a variance note whenever a figure moves more than you expected, even if no one has asked yet.
At the half-year mark, run a formal comparison, not just a filing. Annualise sales, recompute holding days, and lay the actuals beside the CMA projections in one table. The workbook in this guide does exactly that, and the worked example below shows the output. If the half-year comparison shows a structural change, such as a lost customer or a permanently slower market, raise it with the branch before renewal season. A mid-year conversation about a revised plan is normal banking. A renewal meeting where the bank discovers the change is an adversarial one.
Keep one file for the whole cycle: the sanctioned CMA, each monthly statement, each variance note, and each branch reply. When the renewal officer asks why September stock exceeded plan, the answer should take one minute to find, not one week to reconstruct. Officers remember files that answer fast. They also remember files that answer slowly, and they price that memory into the renewal discussion.
What if your business is seasonal?
Seasonality is the best innocent explanation for a stock against CMA gap, and also the most abused one. A genuine seasonal business builds stock before the selling season and liquidates it during the season, so a single month stock figure will often sit far above the annual average implied by the CMA. The bank knows this. What the bank does not accept is seasonality claimed without evidence: no order book, no prior year pattern, and no liquidation month in sight.
Make seasonality provable in three lines. Show the same month last year, so the pattern is visible. Show orders or advances for the coming season, so the build has a destination. Name the month by which the stock will liquidate, so the officer has a date to check against. A seasonal note with those three lines closes the query. A seasonal note that only says business is seasonal invites the next question, which is always: show me. If your CMA projections were drawn flat across months for a seasonal business, say so at renewal and ask for a seasonal CMA, because a flat plan will manufacture a false variance every peak month.
What should you do before you file the next stock statement?
Run a five minute check before you sign. Confirm the stock value ties to the books on the statement date. Confirm creditors for stock are deducted, not netted away silently. Confirm debtors are split by age, with the over-age figure visible. Confirm the statement date matches your GST cut-off. Confirm any figure that moved sharply against the CMA carries a one paragraph note. Five checks, five minutes, and the file reads as controlled.
If you find a gap you cannot explain, do not file and hope. Call the branch, or write a short note with the filing, that names the gap and the date by which you will close it. Banks deal with imperfect months every day. What they penalise is surprise, not imperfection. A borrower who discloses a gap with a date looks prepared. A borrower whose gap is discovered by the officer looks careless. The gap is the same. The reading is different.
Worked example: Mehta Traders at the half-year mark
Mehta Traders filed its CMA in April with projected sales of Rs 1,200 lakh for the year, closing stock of Rs 200 lakh, debtors of Rs 150 lakh, and creditors of Rs 90 lakh. At 30 September, six months in, actual sales were Rs 540 lakh, stock was Rs 245 lakh, debtors were Rs 175 lakh, and creditors were Rs 60 lakh. Annualised sales are Rs 540 lakh times 12 divided by 6, which is Rs 1,080 lakh. The table below lays the actuals beside the CMA plan. Every figure in this table is a formula in the workbook, not a typed value.
| Figure (Rs lakh, except days) | CMA projected | Actual at 30 Sep | Variance |
|---|---|---|---|
| Annual sales | 1,200 | 1,080 annualised | -10.0 percent |
| Closing stock | 200 | 245 | +22.5 percent |
| Debtors | 150 | 175 | +16.7 percent |
| Creditors for stock | 90 | 60 | -33.3 percent |
| Stock holding days | 61 | 83 | +22 days |
The pattern is a pile-up, not a bookkeeping error. Sales run 10.0 percent below plan, yet stock runs 22.5 percent above plan, and holding days stretch from 61 to 83. Debtors also run 16.7 percent above plan, so cash is stuck twice: once in unsold stock, once in uncollected bills. Creditors falling 33.3 percent means suppliers are being paid faster even as sales slow, which tightens cash further. No single figure proves a problem. Together, they ask one question the borrower should answer before the officer asks it: what is the stock build for, and when does it sell.
The drawing power check uses the example sanction terms: margin 25 percent on stock and 40 percent on book debts, with debtors older than 90 days excluded. Stock of Rs 245 lakh less creditors of Rs 60 lakh gives net stock of Rs 185 lakh, less 25 percent margin gives Rs 138.75 lakh. Debtors of Rs 175 lakh less over-age debtors of Rs 25 lakh gives Rs 150 lakh, less 40 percent margin gives Rs 90 lakh. Drawing power is Rs 228.75 lakh, below the sanctioned limit of Rs 250 lakh, so the drawable amount is Rs 228.75 lakh. The limit did not change. The drawable amount did, because the statement changed. That is the monthly mechanism in one paragraph, and it is why the monthly statement matters as much as the annual CMA.
| Drawing power step (Rs lakh) | Value | How it is computed |
|---|---|---|
| Stock less creditors | 185.00 | 245 minus 60 |
| Less margin at 25 percent | 138.75 | 185 times 0.75 |
| Eligible debtors less margin at 40 percent | 90.00 | (175 minus 25) times 0.60 |
| Drawing power | 228.75 | 138.75 plus 90.00 |
| Drawable amount | 228.75 | Lower of drawing power and Rs 250 lakh limit |
The variance response ladder below is the workbook own teaching aid, not a bank rule. No bank publishes this ladder, and the article does not claim otherwise. Use it to decide how much explanation a gap deserves, not as a standard to quote to your bank. At renewal, the same discipline applies, because the limit is reviewed annually against fresh stock and financial papers. Our working capital renewal guide covers that cycle.
| Variance size (workbook illustration only) | Workbook flag | Borrower action |
|---|---|---|
| Within 10 percent | OK | File normally, no note needed |
| Beyond 10 percent | REVIEW | Check the books, confirm the cause |
| Beyond 20 percent | EXPLAIN IN WRITING | Attach a note with cause, amount, and correction month |
Sources
Primary sources: RBI Master Circular on IRAC norms, para 4.2.4, for drawing power resting on a current stock statement, the three month staleness rule for irregular drawings, and the 90 day rule for non-performing status (carried forward in the RBI (Commercial Banks: IRAC) Directions, 2025, RBI/DOR/2025-26/164); RBI Master Circular on Management of Advances to urban co-operative banks, for regular monthly stock and receivable statements with periodic physical verification as a monitoring measure; RBI speech on the regulatory framework for credit, for the 1988 move to post-sanction scrutiny, the Tandon and Chore Committee role, and the April 1997 withdrawal of the MPBF prescription. Bank practice, labelled as such in the text: monthly stock statement contents, ageing cut-offs, and margin levels, which vary by sanction letter; and the workbook flag levels, which are the workbook own illustration, not a bank rule.
External links: RBI Master Circular on IRAC norms, para 4.2.4, RBI Master Circular on Management of Advances to urban co-operative banks, and RBI speech on the regulatory framework for credit. All three returned HTTP 200 when checked on 2026-10-30.
Frequently Asked Questions
Last updated: October 2026. Framework cited: RBI IRAC norms (Master Circular para 4.2.4; 2025 Directions), RBI Master Circular on Management of Advances to urban co-operative banks, and bank sanction letters for filing frequency, margins, and ageing cut-offs.
Do I file a stock statement and CMA data for the same loan?
Yes, for a working capital limit you file both, but at different times. CMA data supports sanction and renewal, usually once a year. The stock statement supports monitoring, usually every month. The bank reads them together: the CMA states what you planned, and each stock statement shows what actually happened.
Can I change my CMA projections in the middle of the year if sales fall?
You cannot silently rewrite a sanctioned CMA. If sales fall materially, tell the branch in writing, with revised monthly figures and the reason, and ask how the bank wants the change recorded. An unexplained gap found by the officer reads as weak control. The same gap disclosed by you reads as honest monitoring.
Does a higher stock figure than the CMA help my drawing power?
Not on its own. Drawing power comes from stock less creditors, less margin, plus eligible debtors less margin, capped at the sanctioned limit. A higher stock figure lifts drawing power only if creditors have not risen with it and the stock is saleable. Inflated or slow stock invites an audit, not a higher limit.
What if my stock statement matches my books but not my CMA?
That is the normal position to explain, not a fault to hide. Books prove the statement is honest. The CMA gap still needs a reason: slower sales, a large order delayed, or a seasonal build. File a short note that names the cause, the amount, and the expected correction month. Unexplained gaps, not honest gaps, slow files.
How often must I file a stock statement?
Your sanction letter sets the frequency, and monthly filing is the common ask for cash credit limits. Some banks accept quarterly statements for smaller limits. File on the due date in the letter, because drawing power rests on a current statement. A statement older than three months makes drawings irregular under RBI IRAC norms.
Does the bank also compare my GST returns with my stock statement?
Yes. Officers cross-check GST turnover against sales in the books and the stock movement in the statement. A large GST gap raises the same question as a CMA gap: which figure is real. Keep GST, books, and the stock statement on the same cut-off date each month, so the three documents tell one story.
Will a variance block my limit renewal?
A variance alone rarely blocks renewal, but an unexplained variance can delay it. At renewal the bank reworks the CMA on actuals, and a year of unexplained gaps weakens the new projections. A file with dated variance notes and a corrected CMA renews faster than a file where every gap is discovered by the officer.
Stock vs CMA reconciliation workbook
Enter your CMA projections and your month end actuals, and the workbook annualises sales, computes each variance, replays the Mehta Traders worked example, flags variances beyond 10 and 20 percent as a teaching aid, and checks drawing power against your sanctioned limit.