(ET)
Power producers have sought special consideration from the Reserve Bank of India regarding the new norms announced for stressed assets, citing that the sector faces problems which are “beyond developers’ control” and this norm can potentially affect projects totalling 75,000 megawatts (mw).
In a letter to RBI governor Urjit Patel, the Association of Power, said, “You would agree that the system has to be tolerant of genuine difficulties, while coming down heavily on mismanagement and fraud. Considering the significant exposure of these assets to factors which are completely beyond the control of developers, we request you to issue special dispensation for the power sector.”
The central bank’s notification ‘Resolution of Stressed Assets – Revised Framework,’ made it mandatory for banks to classify even a one-day delay in debt servicing as default. In case an account, with exposure of Rs 2,000 crore and above as on March 1, 2018, defaults, then they have to formulate a resolution plan and execute it in 180 days, or the account will be referred to NCLT for Insolvency and Bankruptcy Code (IBC) proceedings.
