Bankers in the country are gathering to discuss the new corporate debt restructuring (CDR) regulations and have urged the promoters should pledge more equity for CDR.
The banks offer extension of repayment period, decreases the interest rate and also convert short-term working capital loans into longer tenure term loans when the companies are unable to pay back their borrowings under the CDR. They have urged corporate not to misuse the new regulations.
Experts say that as much as 30 per cent of new restructuring will be in eh power structuring while other sectors include aviation, construction, engineering, steel, textiles and telecom infrastructure.
"We have decided to demand higher capital infusion, to the tune of 20-25 percent of corporate debt restructuring amount being sought by the promoters of companies that seek loan revamp, from the current 15%. However, no final decision has been taken," said SBI deputy managing director Soundara Kumar.
Top bankers in the country met to discuss the matter after the union finance minister asked banks to make their CDR programmes stricter for those promoters who misuse the funds after CDR. The total number of CDR cases rose from 49 in the previous financial year to 84 during financial year 2012.
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