Welcoming the Supreme Court ruling quashing the RBI circular on resolution of stressed assets, the Association of Power Producers Tuesday said it will give some breather and flexibility to restructure their debt. The apex court quashed the RBI circular of February 12, 2018, that made it mandatory for banks to recognize even a one-day defaults by the borrowers and resolve the problem in 180 days failing which such accounts must be referred to NLCTs for resolution for large account of Rs 2,000 crore and above.
“The circular had outlined impractical conditions and timelines for resolution and also had an inbuilt bias against the existing owners of stressed projects,” APP director-general Ashok Khurana said in a statement. He further said with the order, stressed power companies and the lenders will have some breathing space as well as flexibility to restructure debts in a manner that ensures continuity and value maximization for lenders as well as for borrowers. This also provides the much-needed relief to power companies like RattanIndia, GMR, GVK, IL&FS and Coastal Energen among others which had been taken to NCLTs under the RBI circular, he said.
