Vinu: Manu, I have a case where the applicant has EPC (Export Packing Credit) as the main limit and CC (Cash Credit) as a sublimit. I’m wondering, will he have separate accounts for EPC and CC, or will it all be under one account?

Manu: That’s a good question, Vinu! Typically, the EPC and CC accounts are linked, but they are often maintained separately. Since EPC is mainly for export financing and CC is for working capital, they serve different purposes. Even though CC is a sublimit of the EPC, the bank may have separate accounts to manage the two types of credit efficiently.

Vinu: So, separate accounts for EPC and CC make it easier to track their utilization, right?

Manu: Exactly. By having separate accounts, it’s easier to monitor and control the utilization of each facility. You can ensure that the funds from EPC are used only for export-related activities, while the CC is used for working capital purposes.

Vinu: That makes sense. Now, should we generate Perfios reports separately for EPC and CC accounts, or is one report sufficient?

Manu: You should definitely generate Perfios reports separately for both the EPC and CC accounts. Since these are different facilities with different purposes, having separate Perfios reports will give you a clearer view of their individual utilization, repayment behavior, and performance.

Vinu: Understood. But how do I calculate the utilization when EPC is the main limit and CC is a sublimit?

Manu: For calculating utilization in such cases, you’ll need to look at both accounts. Here’s how you can approach it:

Vinu: That clears things up. So, by tracking both EPC and CC separately and calculating utilization for each, I can get a clear view of how the applicant is using the facilities.

Manu: Exactly! Keeping them separate gives you a transparent picture of their financial management, and generating separate Perfios reports helps in assessing the risk and repayment capacity more accurately.

Vinu: Thanks, Manu. Now I know how to handle such cases more confidently