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Money > PTI > Report August 23, 2001 |
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RBI finalises corporate debt restructuring schemeThe Reserve Bank of India has finalised a scheme for restructuring of corporate debts of viable entities affected by internal or external factors, outside the purview of BIFR, debt recovery tribunal and other legal proceedings. The much-awaited corporate debt restructuring scheme would be applicable only to multiple banking accounts/syndicates/ consortium accounts with outstanding exposure of Rs 200 million and above with the banks and financial institutions to ensure timely and transparent mechanism, RBI said in a notification on Thursday. The framework will aim at preserving viable contracts that are affected by certain internal and external factors and minimise losses to creditors and other stakeholders through an orderly and co-ordinated restructuring programme. The CDR mechanism was on the lines of the one prevalent in countries like UK, Thailand, Korea and Malaysia, RBI said in a circular to commercial banks and added that it would consist of a three-tier structure -- Standing Group, Empowered Group and CDR Cell. The Empowered Group would be mandated to look into each case of debt restructuring, examine the viability and rehabilitation potential of the company and approve the package within a specified time frame of 90 days or at best 180 days of reference to the group.
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