Corporate Debt Restructuring process of Sapient Services
Corporate debt restructuring (CDR) is a process that enables companies to manage their debt obligations more effectively. The Reserve Bank of India (RBI) introduced the CDR process in 2011 to help banks improve their financial health. This process allows banks to review their asset quality and balance sheet performance over a period of three years and decide whether to restructure their loans or not. In this article, we will explore the Corporate debt restructuring process, the terms used to describe it, and the current economic scenario in India. The CDR Process The CDR process involves five steps. The first step is the submission of a formal request for a credit review mechanism (CRM) by an entity to its bank or financial institution. This is called a “pre-proposal” or “formal application.” The second step involves the CRM cell at RBI reviewing the pre-proposal before issuing final approval under two conditions: (i) if there are no grounds for rejection in respect of any materia...