New RBI Norms on Debt Restructuring

The Reserve Bank of India has notified a ‘Strategic Debt Restructuring Scheme’ as part of its ‘Framework for Revitalization of Distressed Assets in the Economy’. Among other provisions, the scheme allows lenders to acquire a controlling interest in a distressed debtor company and appoint professional management to run the affairs of the company as part of a debt restructuring exercise in appropriate cases. 

This is based on Vidhi’s recommendations in a concept paper submitted to the RBI in October last year as part of our research mandate from the RBI. The Scheme can be accessed here.  


Revival and Rehabilitation of MSMEs

The Notification on instructions for the Framework for the Revival and Rehabilitation of Micro, Small and Medium Enterprises, issued by the Central Government dated 29th May, 2015 provides for an out-of-court mechanism for the rehabilitation of sick MSMEs. It intends to provide early and feasible solutions to bankruptcy proceedings, without procedural delays. 

The Notification is based on the recommendations contained in Chapter 8 of the BLRC's Interim Report, which Vidhi assisted in drafting.