| CDR is a necessity especially in this era where economic changes in the form of upturn and downturn are a way of life and a part of business cycles for individual companies. Taking into consideration the need, the Reserve Bank of India, for that purpose, put in place the scheme of CDR in August 2001 based on the mechanism prevalent in other countries . CDR has received attention because of the extraordinary rise in the number and volume of advances being restructured under the scheme recently, especially in Banks. The guidelines on restructuring have generally been used to the advantage of both the borrowers and the lenders , mostly banks, in situations of economic downturns and liquidity problems. Due to the extraordinary rise in the cases referred to and restructured under CDR mechanism during the current and previous fiscal years, questions are being raised as to whether this indicates a general downturn or gross misuse of the CDR Mechanism by banks and corporate borrowers. Any kind of restructuring has to be accompanied by prudence on the part of the lenders and financial discipline on the part of the borrowers. |