Economic Times reported that banks, led by State Bank of India, are close to finalising resolution plans for at least half a dozen stressed power companies involving total loans of INR 50,000 crore, which could result in banks taking more than 50% haircut.
The Allahabad high court has asked Reserve Bank of India to make its final submissions on the case filed against its circular by power companies while fixing the matter for hearing on Aug 20.
The Reserve Bank of India (RBI) has said that stress in the power sector has been caused by state-run utilities being favoured at the expense of private ones amid an escalating row with the government over the central bank’s February 12 circular that tightens loan default rules.
A new round of tit-for-tat tariffs in the US-China trade conflict has torpedoed oil prices, while the Russian rouble tumbled to its lowest since late 2016, as the US slapped fresh sanctions on the country.
The Allahabad High Court on Thursday asked the Reserve Bank of India (RBI) whether it could relax its February 12 circular mandating 1-day default trigger for resolution of stressed assets, exclusively for the power projects.
Senior bankers on Thursday apprised the parliamentary committee on energy of the enormous impact and “practical difficulty” of implementing the Reserve Bank of India’s circular regarding power assets within a six-month time frame.
Stressed power assets have got a major boost as the power ministry has strongly recommended substantial changes to the RBI’s controversial Feb 12 circular on loan defaults that industry says will send capacity of 30,000 megawatts into liquidation, while the coal ministry has assured higher fuel supply to thermal plants with the help of auctions.
What’s the best way to solve the stressed assets problem in the power sector? That’s a $53-billion (₹ 3.6 trillion) question. According to Bank of America Merrill Lynch, that’s the total amount of stressed debt in the power sector.
RBI Governor Urjit Patel voted for interest rate hike citing inflation risks and related uncertainties while his deputy Viral Acharya felt there was no alternative to it by 25 basis points, as per the minutes of the MPC meeting released today.
The power sector is unlikely to get any relief in the near future from its outstanding debt of Rs 1.8 lakh crore, as the Reserve Bank of India (RBI) has refused the Finance Ministry’s request to give forbearance to the sector.