This report analyses the role of covenants in the Indian context and how their usage and strict adherence to them could have (if not completely) reduced the stress in the banking system by providing some kind of a counter cyclical buffer to the high lending growth that was seen prior to FY12.
The report is broken into four sections covering i) Covenants and their role ii) Covenants in the Indian context (present status) iii) A look back on the stressed assets and learnings thereof iv) Sample case studies to identify how the use of covenants could have reduced the stress for borrowers and lenders much ahead of the actual stress.
It was released at the 7th Financial Markets Summit held on 10 November 2016 at Mumbai.