The Hindu Business Line : `Revamp corporate debt rejig facility'

THE PHD Chamber of Commerce and Industry (PHDCCI) has called for urgent action from the Reserve Bank of India for revamping the corporate debt restructuring (CDR) facility.

In a statement, the chamber said that the CDR facility needs to be made "borrower-friendly" to enable the corporates to take full advantage of the facility and to reduce the banks' non-performing assets (NPAs).

The chamber has highlighted that an institution allows borrowers to reduce the rate of interest by replacing the existing rate of interest with the prevalent market rate of interest.

On the other hand, banks are demanding upfront premium as high as up to 50 per cent of the differential interest benefit allowed to the unit.

"This rate of interest (what the banks demand) is still on the high side as compared to prevailing rates from other institutions," the statement said.

PHDCCI has held that such an offer can be advantageous only if no premium is demanded.

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