JALNA STEELS AND ALLOY PRIVATE LTD.

It was June 20, 2022 the monsoon for the year had set in and the weather in the region had become significantly pleasant compared to what was till last week. However, on that day evening Mr. Vignesh, the CGM heading the Credit Department of Eastern Commercial Bank (ECB) was in a state of confusion about recommending the credit facilities requested by Jalna Steels and Alloy Private Ltd (JSAPL). The company had requested a fresh term loan of Rs. 60 crore, cash credit Rs. 50 crore and financial bank guarantee of Rs. 5 crore. His concern was how the company could make its projected financial statements such that they show exactly the same amount of working capital loan the management of the company is demanding from the bank. When he reflected on his long experience he could recall that in most cases the projected financials led to the exact amount of working capital the borrowers were sanctioned with and felt the need for making necessary amendments to the process followed by the bank.