NEW DELHI: With the Power ministry pushing the Reserve Bank of India (RBI) to relax its revised bad loans norms, a meeting scheduled on Tuesday between officials from the two has been postponed.
According to Power Minister
R K Singh, who spoke to reporters at an event here, “it (the meeting) has been postponed. (The meeting will take place) some other day.”
The meeting was expected to see the RBI and the government try to resolve differences on how to go about resolving the bad loans issue, with the power sector right in the eye of the storm.
The RBI had come out with ‘Resolution of Stressed Assets-Revised Framework’ on February 12, 2018.
Under these much stricter guidelines, even a one-day default in debt servicing would require reporting to RBI and implementation of Resolution Plan. All accounts with exposure of Rs 2,000 crore and above, on or after March 1, 2018 and in default have to formulate a resolution plan within 180 days failing which the case has to be mandatorily referred to NCLT for Insolvency and Bankruptcy Code (IBC) proceedings.
The new guidelines have hit power producers and lenders to the sector particularly hard, with estimates stating that this could result in more than Rs 1.75 lakh crore of additional NPAs from the power sector. The Association of Power Producers had written to RBI and Prime Minister Narendra Modi that more than 75,000 MW assets - under operation or under construction - are severely stressed due to reasons including lower availability of coal, pending receivables from discoms, among others.
The Association had also sought to extend the implementation period of Resolution Plan from 180 days to one year as “the current timeline to complete the resolution plan is extremely difficult.”