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Turnover Method (Nayak) Calculator
Result
Chart
Show formula & working
Requirement = Projected turnover × requirement %
Bank finance = Requirement − higher of (Turnover × margin %, actual NWC)
RBI's MSME FAQ: under the Nayak Committee method, working capital limits are computed at a minimum of 20% of estimated turnover for limits up to ₹5 crore. The traditional split is a 25% requirement of which the borrower brings 5%.Details
Turnover method for MSE working capital (Nayak Committee): rates and rules as of 29-Jul-2025 · Source: RBI FAQs on Micro, Small and Medium Enterprises (updated as on 29 July 2025), Q.7: Nayak Committee — minimum 20% of estimated turnover for limits up to ₹5 crore; not found in the MSME Master Direction (updated 9 Feb 2026). Every figure based on it stays editable.
How this works
For small and medium working capital limits, banks can size the limit as a share of the sales the business expects, rather than building a full projection of current assets.
The traditional rule takes the working capital need as a quarter of turnover, with the business bringing a fifth of that (5% of turnover) and the bank financing the rest (20%).
Frequently asked questions
Is the 20% a ceiling or a floor?
RBI's FAQ describes it as a minimum for limits up to ₹5 crore. Banks can sanction more after appraising the business's actual operating cycle.
Which turnover counts?
The projected turnover for the coming year, which lenders check against past performance and GST returns.
Working capital limits up for renewal?
Assessment method, drawing power and the right mix of CC, OD and bills change what you can draw. Talk to Rytvae.