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The 5:25 scheme allows banks to extend long-term loans of 20-25 years to match the cash flow of projects, while refinancing them every 5 or 7 years. Until now, banks were typically not lending beyond 10-12 years. As a result, cash flows of infrastructure firms were stretched as they tried to meet shorter repayment schedules. Under SDR, banks who have given loans to a corporate borrower gets the right to convert the full or part of their loans into equity shares in the loan taken company. The SDR scheme which was introduced by the RBI in June 2015 thus helps banks recover their loans by taking control of the distressed listed companies. The SDR an initiative can be taken by the group of banks or JLF that have given loans to the particular defaulted entity. Scheme for Sustainable Structuring of Stressed Assets (S4A) -a distressed company to be eligible for S4A, the RBI has laid down three conditions. The project must be operating and already generating cash. The total loans to the entity should be ₹500 crore or more. The lending banks are required to hire an independent agency to evaluate how much of the debt is ‘sustainable’. For the loan to be eligible for S4A, at least 50 per cent of it should be ‘sustainable’. While RBI’s earlier ideas to resolve bad loans such as Strategic Debt Restructuring (SDR) required banks to oust existing promoters, S4A allows the incumbent management to continue, as long the default isn’t wilful.
Shares of Vinay Ltd. And Sagar Ltd. are currently traded at Rs.100 and Rs. 20 respectively. Vinay Ltd is acquiring Sagar Ltd and the market price of bot...
In the RBI’s circular on hedging foreign exchange risk, what is the maximum notional amount for derivative contracts involving INR without requiring u...
Calculate Gross profit ratio:
From the following information of XYZ Ltd. for the year ended 31st March, 2024, calculate the total Finance Costs:
Interest paid on Term Loan: �...
Which of the following steps were taken during the Liberalisation process in India?
I- The new policy encouraged the entry of private sector firm...
In which city is the Advertising Standards Council of India (ASCI) headquartered?
How many Infrastructure Investment Trusts (InvITs) were registered at the end of the period 2023-24, as per SEBI Annual Report 2023-24?
Dexie Ltd has a preferred stock that pays a dividend of 8 per share and the current price of stock is 100. What is the cost of preferred stock?
All revenues received by the Government, loans raised by it, and also receipts from recoveries of loans granted by it, together form the _________.
A substandard asset is such that it has remained in the NPA status for a period of less than or equal to ____________ .