HYDERABAD: The Rural Electrification Corporation (REC) Ltd has warned the Irrigation department that loan accounts linked to the Kaleshwaram Irrigation Project Corporation Limited (KIPCL) and Telangana Water Resources Infrastructure Development Corporation (TSWRIDC) risk being classified as Non-Performing Assets (NPAs) if overdue payments are not cleared this month.
In a letter to Principal Secretary (Irrigation) Rahul Bojja, the REC said the total dues from the two special purpose vehicles (SPVs) stand at Rs1,393.65 crore, which have been pending since March 31, 2025. Of this, critical overdues are Rs 319.74 crore for TSWRIDC and Rs 229.75 crore for KIPCL.
The letter stated that unless payments are made by June 28 and June 29 respectively, the accounts could slip into NPA status. “Both the borrower accounts have already been reported as SMA-2, as per RBI guidelines, and classified as Stage-2 under the Companies Act, 2013. This delay in serving the dues will have a negative impact on the financials and rating of the utilities and state as a whole,” the REC wrote.
The public sector lender urged the Irrigation department to arrange funds to clear the dues immediately. The accounts had already crossed the 60-day overdue threshold, which falls under the Special Mention Account-2 (SMA-2) category used by banks to monitor stressed assets.
The REC had sanctioned Rs 30,536.08 crore to KIPCL. In October 2024, the state government had requested that interest on all term loans be consolidated and capped at 9% per annum.
Subsequently, in December, Chief Minister A Revanth Reddy wrote to Union Finance Minister Nirmala Sitharaman seeking the restructuring of loans availed from the REC and the Power Finance Corporation (PFC).
These loans are now being serviced through the state’s Consolidated Fund.