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RBI Maintains Its Stand on Resolution of Stressed Assets

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The Reserve Bank of India (RBI) maintained its stand on the revised norms for stressed assets and stuck to the August 27 deadline for completing resolution proceedings. The court had on August 2 sought RBI’s reply on the government’s recommendation to extend deadline for completing resolution proceedings by 180 days. The deadline, as per the RBI circular, expires on August 27. RBI presented its case on Thursday and declined sector specific relaxations. The Allahabad High Court will continue its proceedings on Friday as the hearing could not conclude on Thursday, a source said. 
The power industry has pinned hopes on the Allahabad High Court where petitions have been filed against the RBI circular that mandated that in case of a loan default, all lenders must decide on a resolution within 180 days, which expires on August 27, or invoke insolvency proceedings against the defaulter without allowing even a day’s extension. The government has recommended an extension of 180 more days for resolution of stressed assets in the high court and announced setting up of a high-level empowered committee headed by cabinet secretary PK Sinha and with representation from the ministries of railways, finance, power and coal, as well as banks having major exposure to the power sector to revive stressed thermal power projects.
Industry sources said lenders are close to finalising the fate of 8-10 stressed power assets, in case they fail to complete all formalities for management switch over by the deadline.
The Economic Times, 10th August 2018

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