Corporate debt recast to get tougher

For India Inc, loan recast by banks is set to become tougher. The corporate debt restructuring (CDR) cell has mandated that the lead bank in a consortium of lenders conduct an audit of how a company has utilized the loan before processing its request for debt recast According to Raj Kumar Bansal, Chairman, CDR Cell, the lead bank could also press for special audit where diversion of funds and fraud are suspected. All references for corporate debt restructuring by lenders / borrowers are made to the CDR Cell. The CDR mechanism covers only multiple banking accounts, syndication/ consortium accounts, where all banks and institutions together have an outstanding aggregate exposure of Rs. 10 crore and above.