Requests for loan recasts could hit Rs 1 lakh crore

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SummaryMore than Rs 1 lakh cr worth of loan recast proposals could hit corporate debt restructuring cell this year.

debt recast of logistics company Arshiya International.

Under new Reserve Bank of India rules, banks need to set aside 5% of the fresh restructured loans as provisions. If the loans turn bad, the provisioning goes up to at least 15%. Higher provisioning affects profitability of banks. In 2012-13, banks restructured R75,000 crore of loans under the CDR mechanism, nearly double the level in 2011-12.

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