October 1 is the date when the new rule of SEBI shall become applicable as per which companies need to declare their loan defaults to banks in a day. But as October 1 and October 2 are trading holidays, the companies need to comply with the ruling on October 3.
However, with the Asset Quality Review by RBI in 2015, it is viewed that most of the big defaults are already known and the exercise is unlikely to affect stock market movement sharply.
Also, views are that the move can result in stock market disruption for sometime and those companies who default by some days on repayment will again boost market sentiments.
At a time when the cash cruch is already persistent in the system, the declaration by companies is only going to add to the woes of the corporate and financial institutions. Currently, several companies are already in the SMA1 or SMA2 category.
Know in detail about SMA, here.
All such steps shall be detrimental to the industry as the corporates are still struggling to recover from the demonteisation and GST compliance. So, the need of the hour is for the bankers , RBI and SEBI to oversee that the rule shall be implemented without disrupting business environment.