Definition of Industrial Sickness
As per the RBI, “A sick unit is one which has incurred a cash loss for last one year, and in the judgement of the bank, is likely to continue incurring cash losses for the incurring cash losses for the current year as well as in the following year and the unit has an imbalance in its financial structure, such as current ratio is less than 1:1 and there is a worsening trend in debt-equity ratio.”
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