Banks could explore tie-ups with a reputed consultancy organization/s, to handhold some of their corporate loan borrowers, to enable them make effective and efficient use of the loans, as well as guiding them towards path of desired progress.
The associated consultancy organization/s can keep the relevant bank/s, posted regarding the overall progress of such loan borrowers from time-to-time, so that there are no negative surprises when it comes to repayment of such loans.
Those corporate loan borrowers which agree to avail such services by such reputed consultancy organization/s, can possibly be extended loans at a preferred rate of interest, due to relatively low risk element of defaulting or turning into NPAs, whether due to genuine reasons or otherwise.
Thus, while such a tie-up can prevent some corporate loan borrowers of such banks, from turning to NPAs, thus proactively addressing "twin balance sheet" problem, it would also help such loan borrowers avoid insolvency related procedures, which may even threaten the very existence of their respective business.
On a positive note, some of such borrowers can also be hand-held towards a better path to progress, which over a period of time could also benefit the relevant bank/s, by giving them confidence to increase their exposures to such entities with relatively lesser degree of risk. This would also ultimately significantly contribute towards our overall economic progress, via giving a boost to employment and aggregate demand.
And for the associated consultancy/s, the benefit would chiefly be in terms of greater market penetration, besides adding to its revenues through consultancy fees from that bank/s, as well as from those corporate loan borrowers which agree to avail of their services.
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