NEW DELHI: After the Reserve Bank of India’s (RBI) refusal to dilute restructuring guidelines for the power sector, Finance Secretary Hasmukh Adhia is slated to hold a second round of meeting with Power Ministry officials in July first week in order to resolve the NPA issue in the sector.
“The meeting will be chaired by the Finance Secretary in July first week. The secretary has already sought opinion from the power sector representatives and officials by Monday. He will review the suggestions and will find another way to resolve the issue,” a senior official from the Finance Ministry told TNIE.
The Financial Services Secretary Rajiv Kumar on Thursday chaired the meeting of all stakeholders including representatives of RBI, power companies and others on the issue. Even while all the power companies expressed their grievances, the matter remained unresolved as the Central bank was reluctant to bend their rules regarding stressed assets.
In February, the RBI introduced its revised framework for resolution of stressed assets, causing huge uproar among the banking and power sector companies.
The circular said that lenders now have to finalise a resolution plan in case of a default on large accounts, of Rs 2,000 crore and above, within 180 days, failing which insolvency proceedings have to be invoked against the defaulter.
The circular was challenged by the Independent Power Producers’ Association of India (IPPAI) in Allahabad High Court, following which the court on May 31 ordered that no action be taken against the power sector under the revised framework. It directed the Finance Secretary to hold a meeting with all the affected stakeholders in June to discuss ways to address issues faced by stressed power plants.
However, now as the RBI refused to buckle under pressure on this issue, the Finance Ministry is now trying to find some alternative to resolve the matter.
“The Finance Ministry is already brainstorming on the issue. All power sector representatives have been asked to give their suggestions, so that the matter is resolved at earliest,” the official said.