Bankers seek more supporter funds
After a series of loan recast exercises, in which banks have taken a hit (like in the cases of GTL Infra and Kingfisher Airlines), lenders are tightening the clamps on borrowers to protect their interests. In a meeting attended by bankers and representatives of the corporate debt restructuring (CDR) cell, bankers have proposed to change the rules to ensure promoters bring in more funds than they do now. According to bankers who attended the meeting, a company may have to chip in with 25 per cent of the haircut taken by the bank while restructuring of loan.
At present, promoters contribute up to 10-15 per cent of the haircut taken by the bank. Banks have to make a provision, that is, allocate higher capital to the extent of the diminution of the loan’s net present value arising out of extending the loan tenure or lowering the interest rate.