Iron and steel manufacturers, power producers and engineering, procurement and constructions companies are among those approaching the CDR cell the most. In fact, iron and steel companies are the biggest beneficiaries of recasts, accounting for more than 21.3% of the recast loans, though at 18.1% EPC firms have also seen a big chunk of loans being reworked.
In the FSR, the central bank noted that RBI had provided regulatory forbearance in classification of standard assets which were restructured through the CDR cell, thereby allowing banks to escape higher provisioning for such accounts. The regulatory concern regarding restructuring arises from the possibility of the relaxations not being used judiciously by banks commensurate with the viability of projects. These relaxations for asset classification and provisioning will be phased out by April 1, 2015.