BL : June 7,2013
To prevent unfit cases from getting their loans restructured under the corporate debt restructuring (CDR) mechanism, the Finance Ministry plans to set up an independent common oversight body, said Rajiv Takru, Financial Services Secretary.
The body will be a recommendatory unit which will vet CDR cases above a certain threshold.
However, he did not specify what the threshold will be and said it will be decided by the banks.
“When banks get a CDR case above a certain amount, they can send it to the body which can give its view to the banks,” he said.
He said that there would not be any government official or banker on the panel. The members would include experts from legal, investigation and financial fields.
The body will give its opinion to the banks in writing so that the banks cannot later say that they were not sufficiently forewarned about the suitability of the case, he added.
Takru further told that banks cannot afford to waste any time to start the recovery process.
“Whatever the assets (collaterals) are, banks must auction them. If banks do not get the right price for the asset, then banks must buy it out,” he added.
deepa.nair@thehindu.co.in
(This article was published on June 7, 2013)
Keywords: corporate debt restructuring, loans restructured, Finance Ministry plans, Takru
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