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May 16, 2012, 04.08 PM IST
Banks continue to reel under asset quality pain. In April, the first month of FY13, they have referred around 15 fresh loan recast cases or more than Rs 6,000 crore to the Corporate Debt Restructuring (CDR) cell. Eight Tayal group companies topped the list with loans of over Rs 2,800 crore.
Banks continue to reel under asset quality pain. In April, the first month of FY13, they have referred around 15 fresh loan recast cases or more than Rs 6,000 crore to the Corporate Debt Restructuring (CDR) cell. Eight Tayal group companies topped the list with loans of over Rs 2,800 crore, a banker familiar with the development told Moneycontrol.com. Loan restructuring is the process when a borrower is unable to make timely repayments and approaches the lender to dilute the original terms under which the loan was sanctioned.
"This situation looks a bit grim. This is the highest number of loan restructuring cases filed in a single month. It seems, a section of lenders did not do their proper due diligence before sanctioning loans. However, these cases are likely to be admitted by the CDR cell in due course," he said on condition of anonymity.
Some of the companies include ICOMM Tele (at around Rs 1,350 cr), Jaybharat Textiles (at Rs 290 cr), Krishna Knitwear (at Rs 790 crore), KSL & Industries (Rs 460 cr), Tayal Energy (at Rs 235 cr), PCH Retail (Rs 330 cr), Actif Corporation (Rs 230 cr), Eskay Knit India (at Rs 229 cr) and Moser Baer Solar (Rs 740 crore).
All these loans are in the flash stage, which is the first stage of restructuring under CDR cell. All are performing standard assets. A loan account can be referred to the CDR cell when at least 75% of the banks (by value) and 60% of creditors (by number) agree to resolve the case under CDR system.
"Tayal group of companies have made some repayments of more than Rs 200 crore to its consortium of 17 lenders. This has helped banks to show them as standard (performing) assets," said an official from a large public sector bank.
Under the regulatory frame work of the Reserve Bank of India (RBI), CDR is an official platform for both the creditors and borrowers to amicably and collectively evolve policies for working out debt restructuring plans.
The CDR cell will make the initial scrutiny of the proposals received from creditors. It happens in two stages: flush stage and final report stage, all related to the economic viability study of the proposal.
Recently, the rating agency Crisil stated that the total amount of restructured loans by March, 2013 is expected to be at around Rs 2 lakh crore (Rs 2 trillion) with a significant portion from large-sized corporate entities.
Tags: Corporate Debt Restructuring , CDR, Tayal group companies , April, Loan restructuring , ICOMM Tele , Jaybharat Textiles , Krishna Knitwear , KSL and Industries , Tayal Energy , PCH Retail , Actif Corporation , Eskay Knit India , Moser Baer Solar, , Saikat Das
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