Despite these safeguards, it appears that, in the recent past, many unviable accounts were restructured by establishing viability only with some kind of financial engineering. 28. Our guidelines on CDR Mechanism have evolved in the context of international experience.
Most of the countries have based their framework for corporate debt restructuring on the UK’s London Approach, wherein, under the leadership of the Bank of England, UK banks developed a set of informal guidelines on a collective process for voluntary workouts to restructure debts of corporates in distress, while maximizing their value as going concerns.