The Reserve Bank of India’s (RBI’s) February 12, 2018 circular asking banks to move insolvency petitions against large non-performing assets (NPAs) that have not been resolved, is based on a ‘one-size-fits-all’ approach without taking into consideration factors such as the reasons for non-payment, power companies told the Supreme Court on Wednesday.
There is no distinction between the kinds of debtors, the reasons for non-payment of the debt or consideration for external factors influencing the sector, senior advocate Abhishek Manu Singhvi, appearing for one of the power companies told the court.
The discretionary power of banks to decide whether an account would turn non-performing asset (NPA) or not had also been taken away by the RBI owing to the circular, he said.
