It has been observed that many unviable accounts were projected as viable on the basis of over optimistic financial projections and some kind of financial engineering. Our extant guidelines allow the banks to examine the viability of accounts for restructuring on the basis of broad parameters prescribed by RBI and benchmarks decided by the banks themselves.
The working group observed that while restructuring of advances on solo basis, banks, particularly at branch or controlling office level where sufficient skill is not available, generally do not establish the viability of the account as rigorously as being done under CDR.