Loans worth R5,169 crore were referred to the corporate debt restructuring (CDR) cell in August compared with over R15,500-crore loans referred in July, a banker with direct knowledge of the development said on Monday.
In the July-September period last year, about 33 cases worth R18,907 crore had been referred to the cell.
Of the 12 cases referred to the cell, the larger ones are AMR India (R1,330 crore), Hanjer Biotech (R786 crore) and Unimark Remedies (R477 crore). The number of restructured loans approved by the cell in August were not available right away. The cell had approved only three cases, worth R1,275 crore, for restructuring in July, the banker said.
In FY13 alone, the cell had approved restructuring for 106 accounts worth R76,479 crore. The pace for restructuring does not seem to be slowing down this year either. In the April-June period this year, the cell had approved loans worth R21,266 crore for restructuring. According to estimates given by eight large banks, over R25,000-crore cases will come up for restructuring by September 30.
Bankers meet every month to take stock of development in each company admitted to CDR cell and whether they should be approved or not. According to analysts, the banking system could take a collective hit of an estimated R13,000-15,000 crore on bottomline in next two years due to tough restructuring guidelines issued by Reserve Bank of India (RBI).
In the final guidelines announced in May, RBI had raised the provisioning requirement for all new restructured loans to 5% starting June. This was higher than the earlier requirement of 2.75%. For all standard restructured assets, the provisioning requirement will be raised to 5% by 31 March 2016, in a calliberated manner.
Moreover, the level of promoter sacrifice has also been raised to a minimum of 20% of bank sacrifice or 2% of the restructured loan amount, whichever is higher.