Banking

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MOHD MOFEEQUE (Querist)
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01 August 2016 Dear Sir,
What is CDR and CMS in Banking and how to pass journal entry in the company book.

Please advise

Amol S Joglekar

Amol S Joglekar (Expert)
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01 August 2016 CDR : Corporate Debt Restructuring
CMS : Cash Management Service.

MOHD MOFEEQUE

MOHD MOFEEQUE (Querist)
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01 August 2016 Dear Sir,
I am not asking full form only while please advise all details and journal entry in the book

Amol S Joglekar

Amol S Joglekar (Expert)
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01 August 2016 CDR : The loan given by bank to companies....at times need to be restructured. (Mostly on account of non repayment by the companies. The same, therefore needs to be restructured. This is done by calculating a FRESH repayment capacity of that company. It is a complex process before bank really sanctions the restructuring programme. The restructuring is done either by extending the repayment period or by lowering the rate of interest.
I am NOT to sure what do you mean by journal entry of CDR......see the loan is appearing in the books of the company. When the restructured amount is sanctioned, no journal entry as such is required to be passed...when the company starts repaying.....the entry would be
debit loan a/c
credit bank/cash as the case may be
For interest
debit interst on loan
credit interest payable.
For interest payment
debit Interest payable
credit bank/cash as the case may be.....
Tell me your further query in this, so that we can go to CMS

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