‘New RBI circular a breather to power sector, but fails to address core issues’

The revised RBI circular on stressed assets is a breather for stressed power producers and empowers banks to once again take decisions for themselves. However, no steps taken by the RBI can address the core issues of the power sector, according to the sector’s representatives.

“The revised RBI circular once again empowers the banks to take a call on what works best for them. The 30-day default window will also allow banks and borrowers to negotiate better terms for debt resolution of stressed assets,” Ashok Kumar Khurana, Director General at the Association of Power Producers (APP), told BusinessLine.

“For the power sector, the RBI circular is not the solution for the stressed assets. Before the elections, the Centre has taken certain decisions to resolve the factors causing stress in the sector. Till now, the approved solutions are on paper and now it’s time to implement them,” he said.