Corporate Debt Restructuring in India
ABHINAV
NATIONAL MONTHLY REFEREED JOURNAL OF REASEARCH IN COMMERCE & MANAGEMENT
www.abhinavjournal.com
CORPORATE DEBT RESTRUCTURING: CONCEPT, ASSESSMENT AND EMERGING ISSUES
C.S.Balasubramaniam Professor, Babasaheb Gawde Institute of Management Studies, Mumbai Email: balacs2001@yahoo.co.in
ABSTRACT Corporate Debt Restructuring (CDR) has been used by the companies while facing ugly finances and the bankers willing to consider a flexible mechanism such as CDR, as the banks /financial institutions have to reduce their Non Performing Assets (NPA) .Based on the recommendations of the Working Group on CDR Reserve Bank of India (RBI) has appealed to the corporate to be exercising caution and financial discipline and the bankers to be prudent and vigilant while granting the CDR to the borrowing companies based on their prevailing financial situation. This research paper assumes topical significance now. The research paper is structured as follows: Firstly, it attempts to study the concept of CDR from the borrowing company’s context as well as from the lending bankers view. The Second part would present statistics on NPA and analysis. The Third part would examine the impact of CDR to the banking system and the economy and the emerging issues and perspectives would be posed in the Conclusion.
Keywords: Corporate Debt Restructuring, Non Performing Assets
Restructured Standard Advances, Reserve Bank of India, Banking System Corporate Debt Restructuring (CDR) CDR is an effective financial tool to provide a flexible mechanism to the corporate management to get back to the top line growth oriented performance ,cutting overheads / other unnecessary expenses consolidating their operations and streamlining their balance sheets, cash flows and finances . CDR would also include heavy dose of financial discipline to be followed by the internal operations, improve cash positions in the short term as well as the short term along a structured path of recovery. As part of corporate
NATIONAL MONTHLY REFEREED JOURNAL OF REASEARCH IN COMMERCE & MANAGEMENT
www.abhinavjournal.com
CORPORATE DEBT RESTRUCTURING: CONCEPT, ASSESSMENT AND EMERGING ISSUES
C.S.Balasubramaniam Professor, Babasaheb Gawde Institute of Management Studies, Mumbai Email: balacs2001@yahoo.co.in
ABSTRACT Corporate Debt Restructuring (CDR) has been used by the companies while facing ugly finances and the bankers willing to consider a flexible mechanism such as CDR, as the banks /financial institutions have to reduce their Non Performing Assets (NPA) .Based on the recommendations of the Working Group on CDR Reserve Bank of India (RBI) has appealed to the corporate to be exercising caution and financial discipline and the bankers to be prudent and vigilant while granting the CDR to the borrowing companies based on their prevailing financial situation. This research paper assumes topical significance now. The research paper is structured as follows: Firstly, it attempts to study the concept of CDR from the borrowing company’s context as well as from the lending bankers view. The Second part would present statistics on NPA and analysis. The Third part would examine the impact of CDR to the banking system and the economy and the emerging issues and perspectives would be posed in the Conclusion.
Keywords: Corporate Debt Restructuring, Non Performing Assets
Restructured Standard Advances, Reserve Bank of India, Banking System Corporate Debt Restructuring (CDR) CDR is an effective financial tool to provide a flexible mechanism to the corporate management to get back to the top line growth oriented performance ,cutting overheads / other unnecessary expenses consolidating their operations and streamlining their balance sheets, cash flows and finances . CDR would also include heavy dose of financial discipline to be followed by the internal operations, improve cash positions in the short term as well as the short term along a structured path of recovery. As part of corporate
References: 1. Anand Sinha: Non Performing Assets have bottomed Out, News Bulletin from All India Bank Employees Association, May 2012. 2. C.S.Balasubramaniam: Non Performing Assets and Profitability of Commercial Banks in India: Assessment and emerging issues, Abhinav Journal July 2012. 3. C.S.Balasubramaniam: BASEL III and Indian Banking: Assessment and emerging Issues, Abhinav Journal, August 2012. 4. BS Reporter: Loan recast: Banking System credibility at stake, says RBI .Business Standard, September 14, 2012. 5. K.C.Chakraborty: Corporate Debt Restructuring: The Issues and Way forward, RBI Monthly Bulletin, September 2012. 6. Edward M.Kerschener: Thematic Investing – Corporate Restructuring Lessons in Corporate Finance, 2009. 7. Dr.A.S.Hosmani & M.R.Jagadish Hudagi: Unearthing the epidemic of Non –Performing Assets: A Study with reference to Public Sector Banks in India. , Zenith: International Journal of Multidisciplinary Research, December 2011. 8. Madan Sabnavis: Are CDRs=NPAs, Financial Express, September 4, 2012. 9. B.Mahapatra :Highlights and Rationale of the recommendations of the Working Group to review the existing Prudential Guidelines on Restructuring of Advances ,RBI Monthly Bulletin ,October 2012. 10. D.Subbarao : Basel III in International and Indian Contexts :Ten Questions we should know the answers for ,RBI Monthly Bulletin ,October 2012. VOLUME NO.2, ISSUE NO.1 48 ISSN 2277-1166