One-fifth of CDR cos queue up again
Generally, a second restructuring of an account makes the account a non-performing asset (NPA). However in case of restructuring done through the CDR cell where the net present value (NPV) is protected, loans are treated as standard assets.
Bankers expect this special dispensation to be done away with when the new restructuring guidelines are unveiled. The RBI working group led by RBI ED B Mahapatra has recommended special dispensation provided to CDR cell that any second time restructuring under CDR restructuring need not be considered as repeated restructuring if it does not lead to negative NPV, be withdrawn.
While unveiling the mid-year monetary policy on October 30, RBI governor D Subbarao said the new guidelines on loan restructuring based on the Mahapatra committee recommendations. Amongst the recent cases that have sought a second round of restructuring include the R9,000 crore restructuring package for Jindal Stainless. In an earlier round of restructuring in August 2009, the company's debts to the tune of R6,500 crore was admitted into the cell.
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