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Case Study on Strategic Debt Restructuring:A Step to Revitalise the Distressed Assets in the Economy


Affiliations
1 College of Engineering Roorkee, School of Management, Roorkee, Uttarakhand, India
2 College of Engineering Roorkee, Roorkee, Uttarakhand, India
     

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The leading financial sector problem at present in India is Non Performing Assets of public sector banks. Reserve Bank of India has initiated several steps; SDR (Strategic Debt Restructuring Scheme) is one among them. Mechanism of this scheme hovers around group of banks or Joint Lender Forum (JLF) committee comprises of the bankers who have lent loans to a stressed borrower. Condition for JLF initiative is being the non recovery of any money by a borrower during the last 60 days that is classified as the Special Mention Account 2. Corrective Action Plan (CAP) is working towards the restructuring of stressed assets. It also deals with the change of management or share transfer from the promoter to the banks. This step of RBI gives a strong footing to the banks to recover the debts and provide corrective shape. This empirical research paper is structured with the following objectives:

1. To understand the reasons of bad debts

2. To understand the viability of financial diversification

3. To analyse the sick unit framework

4. To assess financial implications on the lender

5. To critically evaluate the sample companies in the study

To achieve above objectives researchers have used secondary data with the help of qualitative tools for analysis.


Keywords

Bad Debts, Distressed Assets, Economy, SDR.
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  • C. Agarwal, “Corporate debt restructuring: A solution with its own issues,” International Journal of Law and Legal Jurisprudence Studies, vol. 4, no. 2, pp. 195-206, 2016.

  • R. Ranjan, “Non performing loans and terms of credit of public sector banks in India: An empirical assessment,” RBI Occasional Papers, vol. 24, no. 3, pp. 82-121, Winter 2003.

  • Corporate Debt Restructuring (Corporate Debt Restructuring) and Strategic Debt Restructuring Scheme. Available https://maheshspeak.wordpress.com/2015/12/11/corporate-debtrestructuring

  • http://www.businesstoday.in/magazine/buzztop/buzz-top-feature/rbi-one-size-fits-all-strategic-debt-restructuring-scheme-is-turning-out-to-be-a-damp-squib/story/243750.html

  • http://www.forbesindia.com/article/ie/restructuring-debt-the-practical-lesson/32282/1

  • https://www.cigionline.org/publications/sovereign-debt-crisis-management-lessons-2012

  • www.indianeconomy.net/splclassroom/.../what-is-strategic-debt-restructuring

  • www.economictimes.com

  • http://indianexpress.com/article/business/banking-and-finance/strategic-debt-restructuring-scheme-a-solution-with-its-own-problems/


Abstract Views: 298

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  • Case Study on Strategic Debt Restructuring:A Step to Revitalise the Distressed Assets in the Economy

Abstract Views: 298  |  PDF Views: 0

Authors

Veeralakshmi
College of Engineering Roorkee, School of Management, Roorkee, Uttarakhand, India
A. K. Chaturvedi
College of Engineering Roorkee, Roorkee, Uttarakhand, India

Abstract


The leading financial sector problem at present in India is Non Performing Assets of public sector banks. Reserve Bank of India has initiated several steps; SDR (Strategic Debt Restructuring Scheme) is one among them. Mechanism of this scheme hovers around group of banks or Joint Lender Forum (JLF) committee comprises of the bankers who have lent loans to a stressed borrower. Condition for JLF initiative is being the non recovery of any money by a borrower during the last 60 days that is classified as the Special Mention Account 2. Corrective Action Plan (CAP) is working towards the restructuring of stressed assets. It also deals with the change of management or share transfer from the promoter to the banks. This step of RBI gives a strong footing to the banks to recover the debts and provide corrective shape. This empirical research paper is structured with the following objectives:

1. To understand the reasons of bad debts

2. To understand the viability of financial diversification

3. To analyse the sick unit framework

4. To assess financial implications on the lender

5. To critically evaluate the sample companies in the study

To achieve above objectives researchers have used secondary data with the help of qualitative tools for analysis.


Keywords


Bad Debts, Distressed Assets, Economy, SDR.

References