Revised guidelines on rehabilitation of sick SSI units

As per the revised definition, a unit is considered as sick when any of the borrower account of the unit remains substandard for more than 6 months i.e. if the principal or interest remains overdue for a period exceeding one year. The requirement of overdue period exceeding one year will remain unchanged even if the period for classification of account as substandard is reduced in due course, or, there is erosion in the net worth due to accumulated cash losses to the extent of 50% of its net worth during the previous accounting year and the unit has been in commercial production for at least two years. The revised criteria will enable Bank to detect sickness at an early stage and facilitate corrective action for revival of the unit. As per the revised guidelines the rehabilitation package should be fully implemented within six months from the date the unit is declared as potentially viable/ viable. During this six months period of identifying and implementing rehabilitation package Bank/Fls are required to do "holding operation" which will allow the sick unit to draw funds from the cash credit account at least to the extent of deposit of sale proceeds.

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