RBI launches CDR scheme
By Our Banking Bureau | 03 Jan 2002
The prime objective of the CDR framework is to ensure a "timely and transparent mechanism for restructuring of corporate debts of viable corporate entities affected by internal and external factors." The CDR will be applicable only to multiple banking or consortium accounts with outstanding exposure of Rs 20 crore and above with banks and FIs.
The CDR scheme is similar to those prevalent in countries like the UK, Thailand, Korea and Malaysia. It has a three-tier structure CDR standing forum, CDR empowered group and CDR cell. The CDR standing forum, consisting representatives of all FIs and banks, will be a self-empowered body that would lay down policies and guidelines.
The formation of the CDR scheme will give an opportunity for both banks and FIs and corporate borrowers to reschedule their respective loans to avoid formation of NPAs.
The CDR standing forum will have as members IDBI chairman and managing director, ICICI managing director, SBI chairman, Indian Banks Association chairman, RBI executive director, as well as the respective CMDs of all banks and FIs.