With SC quashing RBI circular, power sector sees debt rejig schemes making a comeback


With SC quashing RBI circular, power sector sees debt rejig schemes making a comeback

Power sector players are expecting a return of the debt restructuring schemes and revival of the Joint Lenders Forum designed to resolve potential bad debts. This follows the Supreme Court’s recent decision to quash the RBI circular of February 12, 2018, on resolution of stressed assets.

The return of the debt restructuring schemes is expected to provide more flexibility to the power generation companies in terms of their debt repayment schedule. Till the February 12 circular came into existence, promoters of power generating companies were gaming the system by colluding with bankers. The circular had sought to rein in on such practices. However, now the promoters may have cause for cheer with the return of debt restructuring schemes.

All eyes are now on the RBI to see how it would handle the Supreme Court verdict and frame a revised circular as promised by the RBI Governor Shaktikanta Das recently.  Read more

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