Average EOD Balance refers to average end-of-day balance maintained in the borrower’s account over a defined period. It helps assess account activity, liquidity buffer, and banking conduct. The period used, such as 3 months or 12 months, must be specified. In MSME underwriting, it provides context for the borrower, facility, banking conduct or approval conditions and helps the credit officer connect operational data with credit judgement. For example, the item may influence eligibility, documentation, sanction conditions or the credit officer’s comfort even if it is not a ratio by itself. It matters because the term can affect how the proposal is documented, interpreted, approved and monitored after sanction. The common mistake is to read it in isolation; it should be checked against borrower documents, bank statements, financials and policy requirements.