‘Change ownership of firms with sticky loan accounts’

CHENNAI: RBI governor Raghuram Rajan also called for ushering new owners or managers for companies whose loans accounts have gone sticky, to improve their operational

CHENNAI: RBI governor Raghuram Rajan also called for ushering new owners or managers for companies whose loans accounts have gone sticky, to improve their operational efficiency.

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“Now, focus should move to improving the operational efficiency of stressed assets, and creating the right capital structure so that all stakeholders can benefit.”

Where it is necessary, new management teams have to be brought in, sometimes as owners, and where not possible, as managers, he added.

“Creative search for new management teams, including the possible use of public sector firms or private sector agents, is necessary, as are well-structured performance incentives such as bonuses for meeting cash flow/ profit benchmarks and stock options.”