The Finance Ministry has said that promoters have to bring in equity upfront and provide personal guarantees before a loan of a company is restructured by banks. The moment a company begins to perform after the restructuring, it should get out of the Corporate Debt Restructuring process and pay commercial interest rates similar to what other viable companies pay.
Lenders shall insist on a certification by the project evaluating agency on whether the stress in the account is due to bad management, inefficient management, or due to diversion of money by promoters, or due to cyclical business downturn beyond the control of the management of company, a letter from the ministry to state-run banks has stated.
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