The corporate debt restructuring (CDR) cell has approved loan recasts worth R19,950 crore in the first four months of the present fiscal, an indication that corporates remain stressed.
The number of referrals, however, took a sharp fall; the figure fell to eight for the same period. Soundara Kumar, deputy managing director and group executive (stressed assets management) at State Bank of India (SBI), said the new approvals could be mostly for accounts that were spillovers from last year: “Referrals to the CDR cell have fallen as we are organising JLFs to identify stress in an account and trying to quickly rectify it.”
In July 2014, the cell approved restructuring of four cases worth R1,950 crore on the back of six referrals worth R5,600 crore. For the four months from April to July, the CDR cell approved 14 cases of R19,950 crore and witnessed eight referrals worth R8,320 crore. In the three months to June 2013, the CDR was referred 28 amounting to R39,521 crore; it approved 14 cases. Animesh Chauhan, executive director at Central Bank of India, said, “We have been successful in preempting the stress in an account and thus many cases have not been referred to the CDR cell.” Other lenders said most of the large cases were being referred to the restructuring cell as most of the large accounts had already been referred to and some of them been restructured already.
“Lenders have referred most large cases to the cell and the remaining such cases will now go through the JLFs, trying to prevent NPA slippage,” said K Subrahmanyam, executive director, Union Bank of India.
In July, cases like Saisudhir Infrastructure (R900 crore) and Core Education (R590 crore) were approved. Meanwhile, loans to companies like Soma Isolux NH1 Tollway (R2,070 crore), Base Corporation (R1,030 crore) and Ankit Metal and Power (R900 crore) have been referred to the CDR cell in July.
State Bank of India(SBI) had said at the bank’s Q1 results recently that inflows into the CDR cell had also slowed and in the first quarter the bank restructured R3,600 crore of standard
accounts and R2,100 crore of NPAs.
Cases referred to the CDR cell had fallen since the June quarter (April-June FY15) with only two cases referred as against 28 referred in the same period last year. Subsequently, the amount of loans referred in the first quarter of FY15 was R2,720