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Debt restructuring on the rise
Aug 31, 2012

Debt restructuring indicates the deterioration in the quality of loans given by lenders, mostly banks. If the quantum of restructured loans rises at a rapid pace, it is indeed a matter of worry. As per credit rating agency Crisil, corporate debt restructuring is likely to surge to Rs 3,250 bn in financial year 2012-13 (FY13), an estimated rise of 49% over the previous year. While restructured debt accounted for about 4.7% of total advances in FY12, the same is expected to increase to 5.7% in FY13. The main reason for this is the increasing financial stress on account of the prevailing slowdown in the economy. State utility boards, construction and infrastructure companies will account for a significant chunk of the restructured loans. Public sector lenders are expected to be the worst hit, accounting for about 80% of the total restructured debt.

Data source: Business Standard
*Crisil estimates

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