C Rehabilitation Recovery
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 67 rapid-fire Q&A cards.
What is the primary objective of rehabilitation of a sick unit under Indian banking norms?
The primary objective is to restore the unit to viability so it can repay its dues to lenders and resume normal operations, rather than proceeding to liquidation.
What is 'financial restructuring' in the context of rehabilitation of sick units?
Rearranging debt/equity mix to restore borrower's financial health.
Which RBI guidelines govern the rehabilitation and restructuring of sick MSMEs?
The RBI's guidelines on 'Framework for Revival and Rehabilitation of MSMEs' govern the process, requiring banks to identify incipient stress early and initiate corrective action.
What is an 'out-of-court' restructuring mechanism in Indian banking?
Voluntary creditor-led resolution without formal legal proceedings.
What is meant by 'incipient sickness' in the context of credit management?
Incipient sickness refers to the early stage where a borrower shows signs of stress such as irregular repayments or declining turnover, before the account becomes NPA, allowing timely intervention.
What is the role of a Lead Bank in consortium lending during rehabilitation?
Coordinates restructuring, monitors implementation, and represents lenders.
What is the cut-off net worth criterion for identifying a large industrial unit as sick?
A large industrial unit is considered sick if its net worth has eroded by 50% or more of its peak net worth during the preceding five accounting years.
What is 'winding up' of a company under the Companies Act and when is it relevant in recovery?
Court-ordered dissolution of a company when rehabilitation is not viable.
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