Loans worth R5,848 crore have been admitted for restructuring by the corporate debt restructuring (CDR) cell in April against R12,655-crore worth cases in March. In the April-June period last year, the CDR cell had admitted 17 cases worth R17,957 crore.
?Usually banks rush with clearing CDR cases during the year-end, so the difference between the March and April numbers may seem larger,? the banker said. Of the cases admitted to the cell, the largest account was that of Corporate Power, worth R3,150 crore. Other cases were A2Z Maintenance & Engineering Services worth R1,300 crore and Gangotri Enterprises worth R600 crore.
In addition, five cases worth R4,747 crore were referred to the CDR cell in April compared with 18 cases worth R22,692 crore referred in March 2013. Of those referred, the largest account is of Arch Pharmalabs worth R2,300 crore, followed by Bilcare?s R1,600 crore. During the month, only one debt restructuring package of Bhadra International worth R370 crore was approved by the cell. The approval of a CDR package requires the mandate of at least 75% of the creditors by value and 60% creditors by number.
Bankers meet every month to take stock of the development in each company admitted to the CDR cell and whether they should be approved or not. The next bankers meeting is scheduled for May 20, according to sources. The banking system could take a collective hit of an estimated R13,000 to R15,000 crore on bottomline in next two years if RBI formalises the draft provisioning norms for restructured loans.
By March quarter end, Punjab National Bank?s restructured book was 10% of loan book, Indian Overseas Bank?s 10%, Central Bank of India?s 13.2%, Union Bank of India?s 5.6%, Syndicate Bank?s 6.3%, and Bank of India?s 6.6%.