Corporate Debt Restructuring and Strategic Debt Restructuring: Defaulters Envy and Banker’s Pride

Ms. Sunita Sharma

doi:https://doi.org/10.17492/mudra.v3i1.6810

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Corporate Debt Restructuring and Strategic Debt Restructuring: Defaulters Envy and Banker’s Pride

Sunita Sharma

https://doi.org/10.17492/mudra.v3i1.6810

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Published Online: June 18, 2016

Author Details ( * ) denotes Corresponding author

1. * Sunita Sharma, Professor and Head, Department of Commerce, Maniben Nanavati Women’s College, Mumbai, Maharashtra, India (sunitasharma12@yahoo.co.in)

The world over, Non-Performing Loans (NPLs) have been a matter of concern for depositors, bank employees and management, governments and the public at large. The concept of restructuring and rescheduling loans has existed in India for several decades. Several steps have been taken by Reserve Bank of India (RBI) to reduce the amount of NPLs and one step is Corporate Debt Restructuring (CDR). During the last few years, there has been an extraordinary rise in cases referred and reworked under CDR. RBI has come out with Strategic Debt Restructuring (SDR) mechanism, through which banks have been empowered to recover their long outstanding dues from the restructured stressed companies. This research paper explains progress report of CDR cases and SDR mechanism. It also highlights the risks and challenges attached with the implementation of SDR packages.

Keywords

Joint Lenders Forum, Debtor-Creditor-Agreement, Empowered Group, Inter-Creditor Agreement, Letter of Approval, Working Group

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