Existing CDR cases to face review test: Takru

As of June 2013, lenders have approved CDR packages for 415 cos with aggregate debt of Rs 2,50,279 cr

After making moves to curtail virtually unchecked flow of cases for corporate debt restructuring (CDR), now it is the turn of cases under CDR packages to be under scanner for “performance review”.

There has been concern on ever growing line of companies going in for debt recast. Reserve Bank of India slapped strict norms to ensure only genuine units came for recast support. But performance and working at companies that are under CDR hardly gets attention. Many of them have been under “CDR” protection for many years without any incentive to move out.

Rajiv Takru, secretary, department of financial services, Government of India said its first step was to block of flow huge number to companies to CDR. The detailed review of existing cases is next in line.

“There is thought to scrutinize each case (there performance) which is under CDR package,” Takru told Business Standard.

As of June 2013, lenders have approved CDR packages for 415 companies with aggregate debt of Rs 2,50,279 crore. The iron and steel sector has lion share with debt of Rs 53,543 crore.

Till June 2012, 309 cases with aggregate debt of Rs 1,68,472 crore were in CDR.

Admitting to lack of detailed performance check, senior public sector bank executive said that many units, hit by economic slowdown and adverse industry specific development, were indeed in need for timely help. But, some have stayed longer and continue to enjoy “protection” without any move to get out.