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Home Best Practices India Banks want timeline set for firms to exit debt recast mechanism

Banks want timeline set for firms to exit debt recast mechanism

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Banks are likely to set a timeline for the exit of distressed companies from the Corporate Debt Restructuring (CDR) mechanism.

This move is being considered as there are many cases of companies not exiting the CDR cell on one pretext or the other despite improvement in their operations and financial health. This is to avail themselves of the benefit of softer interest rates under CDR.

Bankers say some companies have not exited the cell for as long as seven to eight years, thus proving to be drag on precious resources.

One of the proposals doing the rounds is that the period of restructuring should be restricted to five years.
 
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