The power sector and Indian Banks Association have locked horns over threshold for approving resolution plan for stressed assets in tune with the Indian Bankruptcy Code in the revised circular on stressed assets being redrawn by the RBI after the Supreme Court on April 2 struck down its earlier circular.
In their recommendations to the RBI, the IBA has recommended that lenders should agree on 90% of the value of any resolution plan against 66% sought by the industry in line with IBC.
IBA has suggested that meeting should be called to seek approval of the resolution plan by 90% of all lenders. The power sector is opposed to this move since it feels that agreement among 90% of lenders is highly improbable and would result in a large number of stressed assets getting referred to NCLT under IBC, eroding value for the stakeholders. Read More