Standard assets, wherein the principal and interest have been rescheduled, would not be de-promoted to sub-standard category if there is sufficient security available or the sacrifice has been expensed off or provided for respectively. Sub-standard assets, wherein the principal and interest have been rescheduled, would not degenerate into doubtful assets if there is sufficient security available or the sacrifice has been expensed off or provided for respectively.

In case any of these assets have been restructured and are showing stellar performance, they can be promoted in the asset classification ranking only after one year of consistent performance abiding by the terms of the restructuring.

The term `manufacture' has probably been defined most comprehensively under the Central Excise Act. The sine qua non here is that a new product comes into existence. The same word has been interpreted under the Income-Tax Act a little bit differently for the benefit of industries with substantial investments seeking tax sops.

There is no definition of manufacture either in the Banking Regulation Act or the RBI Act/Master Circulars. As per the laws of interpretation, if one were to hazard a guess, manufacture under the RBI Notification would mean a factory with large land area, assortment of buildings and dark smoke emanating out of darker chimneys. Hotels, multiplexes and other such borrowers would be out of the restructuring canvas.

It needs no mention that many of these industries face problems akin to that of manufacturing units and, hence, step-motherly treatment for such units is not warranted.

If this was the intent, there is an element of injustice done to non-manufacturing units which have fallen upon harder times. Such units too could face starting hiccups, roadblocks before the lending institution labels them as NPA and major hurdles after the label has been stuck on them. Many of them who come to the negotiating table for a deal are shooed away since the Master Circular does not permit entertaining their cases. With the Supreme Court giving the nod to sell the assets taken over from borrowers under the SARFAESI Act, such units could find their way into the hands of banks even without giving them a fair hearing.

Stretching the argument a bit further, an individual who has taken a housing loan and has defaulted could find himself bereft of it even before he could think of a way of retaining it. This may not have been the intention of the RBI since it gives a long rope to the big ones under the CDR scheme.

The 2004 version of the Master Circular could be a little bit more masterly than its predecessors. They could do a favour to non-manufacturing units, too, by including them in the rehabilitation portfolio as well.

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