Cos tap CDR cell to rejig Rs 52k-cr loans in Apr-Nov
According to an ICRA report, standard restructured advances could move up to R3.7-4.2 lakh crore or 6.5-7.5% of advances by March 31, 2013 against R2.3 lakh crore as on March 31, 2012. It also notes that around 40-50% of banking sector exposure to the power sector may need to be restructured. The report goes on to state that gross non-performing assets levels for the banking industry are likely to cross R2 lakh crore and reach 3.6-3.8% of gross advances as on March 31, 2013, up from 2.8% as on March 31, 2012.
As much as 15-20% of new referrals are cases seeking a second admission to the CDR cell. A second round of restructuring generally occurs when the first round of restructuring fails to help the company. It therefore requires further moratorium and debt infusion to revive the business.
If one were to include CDR cases previously restructured bilaterally between banks and corporates (outside the CDR cell), this would take the tally of cases seeking second restructuring to much higher levels. A recent note from brokerage firm Prabhudas Lilladher, which emerged after a meeting with the CDR cell, states that a large proportion (greater than 50%) of the incremental cases being referred now are second restructuring cases.
Between its inception in 2001 till the end of this financial year, the CDR cell will have successfully negotiated exits of 80 cases worth over Rs 60,000 crore. While there
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