SDR is a scheme designed to recover bad assets of banks. Or in other words, it aims to convert bad assets into performing assets. Under SDR, banks who have given loans to a corporate borrower gets the right to convert the full or part of their loans into equity shares in the loan taken company.
After the conversion, all lenders under the JLF (Joint Lenders’ Forum comprising of lender banks) must collectively hold 51% or more of the equity shares issued by the company.
