K C Chakrabarty: Corporate Debt Restructuring - issues and way
forward
Address by Dr K C Chakrabarty, Deputy Governor of the Reserve Bank of India, at the
Corporate Debt Restructuring Conference 2012, organized by Centrum Group, Mumbai,
11 August 2012.
* * *
Assistance provided by Shri M.P.Baliga, Ms Dimple Bhandia and Shri M. K. Poddar in preparation of this address
is gratefully acknowledged.
1. Ms. Soundara Kumar, Deputy Managing Director, State Bank of India, Mr. Siby
Anthony, Managing Director & CEO, Edelweiss Asset Reconstruction Co. Ltd.,
Mr. R. Sundaram, President (Finance) & Company Secretary, Indo Count Industries Limited,
Mr. T.R Madhavan, Executive Chairman, Centrum Group, and, seated in front of the dais,
Mr. Chandir Gidwani, Promoter, Centrum Group, other distinguished guests, members of the
print and electronic media, ladies and gentlemen, I wish all of you a very good morning. I
must also remember in absentia, Mr. K. V. Krishnamurthy, ex-Chairman and Managing
Director, Bank of India, because of whose request I am here today. It is indeed my pleasure
to be here today to discuss this very topical subject of Corporate Debt Restructuring - a
subject in which I also have a lot of personal interest.
2. Corporate Debt Restructuring (CDR) or simply restructuring of loans and advances,
with all its pros and cons, is an effective financial tool, especially during the times of crisis, for
smoothening the adverse effects of economic downturns on the borrowers of credit as well
as their lenders. I congratulate the organisers of the Seminar for choosing this very relevant
topic at a time when the world economy has completed five years since the sub-prime crisis
in the USA in mid-2007, which gave way to the full-fledged global financial crisis of 2008 and
the global recession of 2009, the fourth such recession since World War II. The present crisis
and the global recession of 2009, like the previous three global recessions of 1975, 1982 and
1991 and the great depression of the 1930s, have necessitated the banks all over the world
to deleverage as also to restructure a large number of their household and corporate debt.
But, any kind of restructuring has to be accompanied by prudence on the part of the lenders
and financial discipline on the part of the borrowers. Absence of these conditions results in
dead weight loss to the society in general.
Ethics and the role of finance professionals
3. I will also like to quote two statements from the corporate mission of the organiser
(Centrum Group) of this Conference, which interconnect the reasons for and solutions to the
woes of the financial sector and which is also relevant to the topic of my discussion.
•
Challenge the status quo and provide financial consultancy and syndicated
products to
deliver value beyond expectations.
•
Focus on conducting business ethically.
Firstly, challenging the status quo and delivering value beyond expectations require
innovation in products and services. However, ethics help in preventing misuse. These facts
can be seen in the genesis of the global financial crisis. It was not the innovative financial
products but the lack of ethics in their design and sale which led to the crisis. CDR was also
a beautiful innovation to protect the values of both the corporates under distress and the
credit portfolio of their lenders. However, due to the extraordinary rise in the number and
volume of advances being restructured under the scheme in recent times, it has come under
media scanner, and engaged the attention of the financial market players, the borrowers, the
regulators and the policy makers. However, it appears that the provisions of the CDR
mechanism have not been used very ethically and judiciously, giving rise to the
unprecedented increase in cases under CDR.
4. Viability criteria, a critical element in any restructuring, and its assessment brings
into picture a number of professionals apart from the essential counterparties to a loan
agreement, i.e. the borrowers and the lenders. Financial services companies and
professionals comprising of investment bankers, Chartered Accountants, Company
Secretaries, Surveyors, Chartered Engineers, Financial Analysts, Cost Accountants,
Lawyers, etc., play a very important role in assessing the viability of restructuring proposals.
Due to constraints of time and skills as also because of statutory requirements, lenders have
to rely on the due-diligence done and certificates given by such professionals. However,
such decisions are prone to Type I and Type II errors of statistics, i.e. an unscrupulous
borrower with an unviable account may avail the benefit of restructuring and at the same
time, a bonafide borrower with a viable account may be denied the opportunity to resurrect
his account. Therefore, ethics and professionalism of individuals in such positions go a long
way in ensuring that such errors do not occur. Centrum and other professionals, therefore,
must ensure that their mission statements and professional codes of conduct do not remain
mere fancy statements but become their
raison d'être.
5. Against this backdrop, I will structure my discussions in various segments. First, I
will elaborate on what constitutes debt restructuring and the genesis of restructuring,
including that of corporate debt restructuring, in the country. I will then discuss why
restructuring is important and also what is the role of regulators in debt restructuring. Debt
restructuring, in particular corporate debt restructuring, has become a subject of discussion
of late. I will touch upon the reasons why this is so, going on to talk about why the Reserve
Bank is concerned in this regard. Finally, I will outline what I feel is the way forward if
restructuring is to continue as an instrument for ensuring the well being of lenders, borrowers
and the society at large.
What is restructuring and its genesis
6. As I briefly mentioned a little while ago, any change in the Terms and Conditions of
the loan or credit, especially in respect of its servicing, is called restructuring of loan/ debt.
Corporate debt restructuring is a specialised institutional mechanism for restructuring large
exposures involving more than one lender under consortium/multiple banking arrangements.
7. Stijn Claessens of the World Bank has defined and explained in detail the term
"restructuring" in his seminal paper "Policy Approaches to Corporate Restructuring around
the World: What Worked, What Failed?" I quote "Restructuring refers to several related
processes: recognizing and allocating financial losses, restructuring the financial claims of
financial institutions and corporations, and restructuring the operations of financial institutions
and corporations. Recognition or resolution involves the allocation of existing losses and
associated redistribution of wealth and control. Losses - that is, differences between
financial institutions' and corporations' market value of assets and nominal values of liabilities
- can be allocated to shareholders by dilution, to depositors and external creditors by
reduction (of the present value) of their claims, to employees and suppliers by payment of
lower wages and prices, and to the government - that is, the public at large - through higher
taxes, expenditure cuts, or inflation. Financial restructuring for corporations can take many
forms: rescheduling (extension of maturities), lower interest rates, debt for equity swaps, debt
forgiveness, indexing of interest payments to earnings, and so on. The main aims of financial
restructuring are separating and treating appropriately viable and nonviable firms and
creating the right incentives for operational restructuring. Operational restructuring, an
on-going process, includes improvements in efficiency and management, reductions in staff
and wages, sales of assets (for example, reduction in subsidiaries), enhanced marketing
efforts, and so on, with the expectation of higher profitability and cash flow". Unquote.
8. Before I go into the details of the issues involving CDR in India, I will like to
elucidate, in brief, the evolution of restructuring. Restructuring of loans and advances is not a
new phenomenon in India and terms such as rescheduling / renegotiation / rehabilitation /
restructuring have been used interchangeably by the Reserve Bank of India (RBI) and banks
since long. Reserve Bank's prudential guidelines on restructuring of advances have evolved
over a period of time from simple instructions to reschedule the loans of people affected by
natural calamities in the late 1970s to comprehensive guidelines on restructuring of loans to
large corporates under consortium/multiple banking arrangement. The guidelines gradually
evolved in tune with the changing dynamics of the financial and real markets by taking into
account the international best practices, recommendations of various committees and
feedback from the stakeholders. CDR is a specialised institutional arrangement for
restructuring of large credit exposures of multiple banks to corporates.
9. The need for such a specialised institutional mechanism arose in the background of
difficulties faced by banks while restructuring their large exposures involving more than one
lender, under consortium/multiple banking arrangement. While it was easier for banks to
negotiate the terms of restructuring of their own exposure with their customers, they found it
difficult to co-ordinate their negotiation and monitoring efforts where restructuring involved
multiple lenders. Therefore, a need was felt to devise a system where restructuring of large
corporate exposures from multiple banks under consortium/multiple banking arrangements
could be carried out. The Reserve Bank was seized of the matter and it put in place the
scheme of CDR in August 2001 based on the mechanism prevalent in countries like the U.K.,
Thailand, Korea, Malaysia, etc. These guidelines were finalised after extensive discussion
between Government of India, Reserve Bank, Banks and FIs.
10. The objective of the CDR framework was to ensure timely and transparent
mechanism for restructuring the corporate debts of viable entities facing problems, outside
the purview of BIFR, DRT and other legal proceedings, for the benefit of all concerned. In
particular, the framework aimed at preserving viable corporates affected by certain internal
and external factors, thereby minimizing the losses to the creditors and other stakeholders
through an orderly and coordinated restructuring programme. Viability of the account was an
important condition for restructuring with malfeasance/fraud and cases of wilful default being
barred from the CDR mechanism. These guidelines also adopted the existing asset
classification benefit available to fully secured standard accounts, on restructuring, which
was previously permitted vide a March 2001 circular. These guidelines on CDR were
subsequently reviewed and revised on the basis of recommendations of a High Level Group
under the Chairmanship of Shri Vepa Kamesam, in February 2003 and a Special Group
under the Chairmanship of Smt. S. Gopinath, in November 2005. Subsequent to these
reviews, guidelines on CDR mechanism allowed restructuring of exposures of Rs.10 crore
and above and restructuring of accounts even classified as Doubtful, subject to their viability,
under category 2 CDR System. Through these guidelines, RBI also delegated the authority
to approve the corporate debt restructuring packages to CDR Standing Forum and CDR
Empowered Group and retained with itself only the authority to issue the broad guidelines.
The current comprehensive guidelines on CDR as well as non-CDR restructuring were
issued in August 2008.
Why is restructuring required?
11. Let me now turn to the question of why restructuring is required. You would agree
that it is a societal convention to attempt to assist anyone in distress. Similarly, restructuring
is a tool to lend a hand of assistance to borrowers who are temporarily in distress, in
particular, where the distress is caused by circumstances beyond the control of the borrower.
Thus, debt restructuring may be required under certain circumstances viz. a general
downturn in the economy or in any particular sector, which result in the deterioration in the
financial health of borrowers. It may also be warranted in case of emergence of legal or other
issues that cause delays, particularly in cases of project implementation. External
developments, such as global factors may also result in widespread impact on the financial
health of borrowers and may necessitate use of restructuring as a tool to help the borrower
tide over difficult circumstances.
Restructuring of accounts - role of the regulator
12. Let me now turn to the role of the regulator in restructuring of accounts. But first let
me explore some myths which are commonly accepted about restructuring in the country.
First, it is a prevalent misconception among the industry and borrowers that restructuring can
be carried out only in cases of standard accounts. The Reserve Bank has clarified time and
again that even the accounts classified as substandard and doubtful can be restructured, if
found viable. However, the asset classification benefit of retention of standard account
classification after restructuring, although it being an event of impairment, is a regulatory
forbearance. Such regulatory forbearance is available on certain conditions laid down by the
Reserve Bank's guidelines. But accounts can always be restructured outside the regulatory
forbearance, if found viable.
13. Even the accounts which are compulsorily downgraded on restructuring due to
absence of regulatory forbearance can be upgraded after satisfactory performance during
the specified period. Industry, borrowers as well as banks approach the Reserve Bank for
granting them the permission to restructure their accounts on account of some hardship. As
the RBI guidelines on restructuring are comprehensive and applicable to all borrowers and
they already provide some regulatory forbearance, such requests imply a request for further
relaxations in our guidelines.
Such frequent tweaking with regulatory guidelines is not an ideal practice and therefore, the
Reserve Bank generally does not agree to such requests. At times an impression is created
that such refusals imply that these accounts cannot be restructured. However, the fact
remains that restructuring of viable accounts is always in the domain of the banks and it is
the duty of the banks to nurture a viable account even in the absence of asset classification
benefit.
14. Having presented some of these common misconceptions about the regulatory
approach to restructuring; let me know turn to why regulators are interested in what is, after
all, a bilateral commercial decision between the borrower and the bank. The regulator's
interest in restructuring emerges from the close linkages between restructured accounts and
non-performing advances (NPAs). Let me elucidate. If the terms and conditions of loans,
especially in relation to repayment are not adhered to, especially for a specified period of
time, account is classified as an NPA. If accounts are restructured, then too, the terms and
conditions of the loans are not fulfilled. But such accounts are not always classified as NPAs.
From an operational perspective, there can be two types of restructured accounts: the first
type of accounts are those which are restructured and classified as NPAs; the second type
are those which are restructured but asset classification is retained as standard.
15. In the first case, regulatory concerns are few and limited to the issue of upgrading
the account to the standard category. In general, a NPA account, can be upgraded when the
terms and conditions of the loan are fulfilled by the borrower. In the case of restructured
accounts, however, the original terms and conditions are changed. Hence, the issue of the
conditions under which the account can be considered as standard or upgraded to the
standard category become pertinent. Regulatory guidelines attempt to lay down the broad
parameters under which restructured accounts can be treated as standard. The second type
of restructured accounts, however, attract greater regulatory attention, due to the associated
moral hazard problems - that of the potential of an account being restructured, at times
repeatedly, to avoid classification as an NPA. This give rise to the need for regulatory and/or
prudential guidance. Hence, the role of the regulator in case of restructuring of accounts
arises with regard to the issue of prudential guidelines for determining the asset classification
of account at the time of restructuring and the time frame for upgradation of restructured NPA
accounts. The regulator also comes into the picture for the purpose of granting regulatory
forbearance with respect to asset classification under exceptional circumstances.
Trends in restructuring
16. As I mentioned at the outset, CDR, has come under the attention because of the
extraordinary rise in the number and volume of advances being restructured under the
scheme in recent times. The guidelines on restructuring have generally been used to the
advantage of both the borrowers and the banks in situations of economic downturns and
temporary cash flow problems. However, due to extraordinary rise in the cases referred to
and restructured under CDR mechanism during the current and previous fiscal years,
questions are being raised as to whether this indicates a general downturn or gross misuse
of the CDR Mechanism by banks and corporate borrowers.
17. Slowdown in the country amidst overall global slowdown is generally being cited as
the reason for the recent increase in restructured accounts. In fact, an analysis of the data
and trends in restructured accounts, especially standard restructured accounts, seem to
suggest differently. The reason for choosing the data on standard restructured accounts is
that possibilities of unviable accounts getting restructured is greater when some kind of
regulatory forbearance is available on asset quality and provisioning.
18. The increase in resorting to restructuring can be partially attributed to excessive
leveraging by some borrowers during boom period. An analysis of the trends in leverage of
the larger borrowers in the country during the first decade of this century certainly seems to
suggest this. Again, there are deficiencies in the manner in which project appraisal is
conducted especially with regard to cash flow analysis and determination of the date of
completion of projects. When commercial operations are delayed, a host of factors including
the uncertainties surrounding the project are cited as the reason. But, when there are
uncertainties, these have to be accounted for during the appraisal of the project and a proper
cushion needs to be built to take care of these uncertainties. Instead, the effort is to appraise
a project keeping in view an aggressive repayment schedule resulting in a very short term
focus of borrowers, banks and financial analysts who appraise the project. This short term
focus, in many cases, is the reason for the need for successive restructuring.
Table 1
Trends in restructuring
19. Let us look at some of statistical trends in restructured advances in the last few
years. From the data available with RBI (Table 1), it is observed that between March 2009
and March 2012, while total gross advances of the banking system grew at a compound
annual growth rate of less than 20 per cent, restructured standard advances grew by over
40 per cent. Resultantly, the proportion of Restructured Standard Advances to Gross Total
Advances increased from 3.45 per cent in March 2011 to 4.68 per cent in March 2012.
20. A further analysis of data suggests distinct trends in restructured accounts in public
sector banks and in private sector and foreign banks. Restructured accounts have growth at
a compound annual growth rate of 47.86 per cent in public sector banks as against a growth
rate of credit of 19.57 per cent. The corresponding figures for private sector and foreign
banks are 8.12 per cent (restructured advances) and 19.88 per cent (credit growth) and (-)
25.48 per cent (restructured advances) and 10.96 per cent (credit growth) respectively.
Further, as on March 2012, the ratio of Restructured Standard Advances to Total Gross
Advances is highest for PSBs at 5.73 per cent, while the ratio is significantly lower for private
and foreign banks at 1.61 per cent and 0.22 per cent, respectively (Tables 2 and 3).
Table 2
Trends in restructuring across bank groups
growth rates in %
Table 3
Ratio of restructured standard advances to gross advances (%)
across bank groups
21. A further granular breakup of the data on restructuring over the last few years
indicates that the ratio of restructured accounts to gross advances is the highest for the
Industries sector at 8.24 per cent (with medium and large industries sector being at
9.34 per cent). The ratio for agriculture stood at 1.45 per cent, while that for services stood at
3.99 per cent (with micro and small services being 0.94 per cent). While the ratio stood at
2.24 per cent for priority sector advances, it stood at 5.83 per cent for non-priority sector
loans. The data clearly highlights the fact that restructuring is resorted to liberally in case of
industrial sector (particularly large industries), while smaller borrower accounts such as
agriculture and micro and small enterprises see less of restructuring (Tables 4 and 5).
Table 4
Trends in restructuring across sectors
growth rates in %
Table 5
Ratio of restructured standard advances to gross advances (%)
across sectors
Trends in restructuring - regulatory concerns
22. The above trends clearly underscore the reasons for the regulatory discomfort with
the manner in which the extant restructuring guidelines and the associated regulatory
forbearance are being used. While clearly there is cause for concern given the pace and
quantum of restructuring over the last few years, the concerns are aggravated by the fact
that the restructuring is neither being permitted in a transparent and objective manner by
banks nor is it being resorted to in a non-discriminatory manner.
23. It is clearly observed that public sector banks share a disproportionate burden of
such accounts. If the reason for the recent increase in restructured accounts is indeed the
economic downturn, then it should have been reflected across all bank groups and not just
public sector banks. The trends are arguably a reflection of the fact that public sector banks
have not been as judicious in the use of restructuring as a credit management tool as the
private sector and foreign banks. Recently announced Q1 results for 2012-13 also indicate
that private sector banks have managed their credit portfolio in a better way than the PSBs.
24. The data on restructuring also throws up an important question as to whether the
small and marginal borrowers are discriminated against by the banks for restructuring of their
accounts, even if found viable. Again, if the economic downturn were the sole reason for the
increase in restructured accounts of late, then the downturn should logically have affected
the weaker segments of the economy more, leading to a higher share of restructured
accounts in the SME and priority sectors, which is not the case. The data on restructuring, on
the contrary, seems to suggest that, when it comes to restructuring, our banks have a
substantial bias towards more privileged borrowers vis-à-vis small borrowers. It seems to
suggest that restructuring of accounts is being resorted to avoid classification of accounts as
NPA.
CDR - an Instrument of misuse / abuse?
25. This brings me to the issue of misuse/abuse of CDR Mechanism by banks as well
as corporates. We may note that even the best of intentions gets defeated when a system is
not used judiciously. The CDR Mechanism was devised as there was a need for an
institutional mechanism to support the large, viable accounts facing temporary problems as
also to preserve the values of large exposures of banks. As previously stated, restructuring
has been a prominent central banking tool in the times of crisis across most jurisdictions
despite its moral hazard aspects. It is also accompanied by the regulatory forbearance on
asset classification, provisioning and capital adequacy in order to provide the banks and
corporates the much needed leeway to rejuvenate their productive assets during times of
crisis.
26. Regulatory forbearance on asset classification in India, however, has become a
standing feature irrespective of the presence or absence of a financial crisis/economic
downturn. Rather, it has been observed lately that even at the slightest sign of slowing down
of the economy or any particular sector of the economy, banks as well as corporates start
demanding even further relaxations in the regulatory forbearance on restructuring. It may be
recalled here that CDR Mechanism has been given some special dispensation regarding
asset classification on repeated restructuring which is not available to non-CDR restructuring.
27. In view of the foregoing observations, I am compelled to infer that, perhaps, the
availability of standing regulatory forbearance to CDR Mechanism has prompted banks to
avoid using other means of credit management judiciously, i.e., proper due-diligence before
sanctioning a credit facility, regular and proper monitoring of accounts after disbursal and
taking prompt corrective action on the first signs of weakness in the accounts. While
establishing viability of the account before restructuring the same is a mandatory condition, it
seems that proper due-diligence is not carried out on this front in a number of cases. In order
to ensure the highest levels of integrity and diligence, the Reserve Bank's guidelines on CDR
Mechanism have delegated the authority to evolve policies and guidelines on corporate debt
restructuring to CDR Standing Forum, consisting of Chairman level representation from
banks; and the authority to approve individual cases of corporate debt restructuring to CDR
Empowered Group, consisting of ED level representation from banks. Despite these
safeguards, it appears that, in the recent past, many unviable accounts were restructured by
establishing viability only with some kind of financial engineering.
28. Our guidelines on CDR Mechanism have evolved in the context of international
experience. Most of the countries have based their framework for corporate debt
restructuring on the UK's London Approach, wherein, under the leadership of the Bank of
England, UK banks developed a set of informal guidelines on a collective process for
voluntary workouts to restructure debts of corporates in distress, while maximizing their value
as going concerns. They also took into account the international federation of insolvency
practitioners (INSOL International)'s "Statement of Principles for a Global Approach to
Multi-Creditor Workouts".
29. An informal out of court system like CDR Mechanism is always a preferable way for
loan resolution, if used prudently and ethically. In this regard, I would like to quote from the
"World Bank Principles and Guidelines for Effective Insolvency and Creditor Rights Systems"
which states that "A country's financial sector (possibly with the informal endorsement and
assistance of the central bank or finance ministry) should promote the development of a code
of conduct or an informal out-of-court process for dealing with cases of corporate financial
difficulty in which banks and other financial institutions have a significant exposure,
especially in markets where enterprise insolvency has reached systemic levels. An informal
process is far more likely to be sustained where there are adequate creditor remedy and
insolvency laws. The informal process may produce a formal rescue, which should be able to
quickly process a packaged plan produced by the informal process. The formal process may
work better if it enables creditors and debtors to use informal techniques."
30. However, issues of moral hazard are also likely to emerge from such informal out of
court systems. Internationally, corporate debt restructurings can also be viewed in the
continuum between an excessive creditor oriented approach and an excessive debtor
oriented approach. An excessive debtor oriented approach gives rise to the aspect of moral
hazard as it may encourage the debtor to take excessive risks in the knowledge that the
burden of any losses will fall disproportionally on creditors.
31. RBI's CDR guidelines attempt to strike a balance between these two approaches by
requiring both the debtors and creditors to make sacrifices and by requiring the promoters to
increase their stake in the form of guarantee or equity. However, these norms have been
circumvented to some extent. While the debtors and creditors avail the benefits of asset
classification, provisioning and capital adequacy on restructuring, they have tried to avoid the
painful sacrifices in terms of provisioning on diminution in fair value and promoters' sacrifice.
Such circumvention of norms not only camouflage the weakness of credit portfolio of banks
but also weaken their defence against expected losses. The inherent credit weaknesses of
such accounts are further aggravated due to lower stake of the promoters in the restructured
business. Taken together, both these aspects decrease the efficiency of the financial system
and increase its vulnerability to external shocks.
Working group to review the existing guidelines on restructuring of advances
32. The need for one more review of our guidelines on restructuring arose in the light of
the above discussed issues. Accordingly, the Reserve Bank constituted a Working Group
(WG) to review the existing guidelines on restructuring of advances. The WG has examined
the issues confronting the restructuring of advances by banks both under CDR and non-CDR
mechanisms. Its recommendations are in the right direction and forward looking. It has
recommended the withdrawal of regulatory forbearance on asset classification on
restructuring; but considering the current domestic macroeconomic situation as also global
situation, this step is suggested, say, after a period of two years. During the interregnum, it
has recommended increasing the provision on accounts which get the asset classification
benefit on restructuring. These are right steps towards discouraging the banks from taking up
the cases of unviable accounts as they will be compelled to use their resources judiciously
and only for viable accounts. In remaining cases, deleveraging should be the correct option.
33. The Working Group has also made its recommendations for putting a cap on
conversion of debt into preference shares; increasing the promoters' stake in restructured
accounts; making the "right of recompense" mandatory, bringing more clarity in calculation of
diminution in fair value, disclosure of only "material" information, etc. These
recommendations, once accepted, will remove the incentives for "adverse selection and
moral hazard". Regulatory forbearance and Government incentives will not be available on
"tap" but only in cases of a severe economic crisis.
The way forward
34. Let me now turn to what I believe is the way forward with respect to restructured
accounts. I have, over the last few minutes, outlined a series of trends in restructured
accounts, which are from a public policy standpoint and from a broader economic and
societal perspective, disquieting. Does this mean that restructuring should not be allowed?
The answer to that is "no" and as I have mentioned earlier restructuring can play a valuable
role for both the borrowers and the banks in situations of economic downturns and temporary
cash flow problems.
35. However, restructuring should be considered only under certain specific conditions.
First, the need for restructuring should arise only due to circumstances beyond the control of
the borrowers and not generally for errors / mismanagement by them. In any case, the
restructuring proposals should be considered from a purely commercial angle albeit with bias
towards giving benefit of doubt to customer. Also, a uniform approach needs to be adopted
for both Standard and NPA accounts while examining the restructuring proposals. Further,
the viability of the project should be established and only after that should any restructuring
proposal be considered. For this, it is important that project appraisal standards are
significantly enhanced. Finance professionals such as those working in Centrum hav