‘RBI overruled House panel on power NPAs’

New bad loan rules irk producers

The Association of Power Producers has accused the RBI of overruling the Parliamentary standing panel on power and key ministries with its February 12 circular that ended all the existing loan restructuring mechanisms and voted for the insolvency code to resolve stressed assets.

The association has also sought a special dispensation from the Reserve Bank saying their defaults are caused mostly by non-payment/delayed payments by state discoms and regulatory delays coupled with poor coal supplies by Coal India.

In a March 12 letter to the RBI, the association has requested Governor Urjit Patel to exclude the power sector from the purview of the new rules.

Indirectly accusing the central bank of overruling the House panel on energy and the views of the Union power and coal ministries, association director general Ashok Khurana says in the letter, “The issue of stressed assets was discussed... with developers, bankers, regulators, and officials of power and coal ministries by the Parliamentary Standing Committee on Energy.”

“Every effort should be made to see that the projects with huge investment do not become NPAs for want of marginal financial infusion or adjustment in the way of making working capital available for passing on the interest variable to the stressed asset,” it said.

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