Stress power assets: HC refuses to stay RBI's February flyer, to hear plea on Aug. 2

HC stated that until he hears the case, no enforcement action can be taken against the energy producers who have petitioned the court against the circular. (Representation photo: Reuters)

The Allahabad High Court on Wednesday refused to uphold the February ruling of the Reserve Bank of India which demanded early detection and timely resolution for stressed badets. However, the HC said until he heard the case, no enforcement action can be taken against the energy producers who asked the court against the circular.

For its part, the government sought two weeks to file its final report the court, saying that it is still a work in progress, sources said. The RBI has remained on its positions and refused to give any boost to the electricity sector, in part because of the concern that such changes could cause a similar demand for electricity. other sectors.

his contributions – detailing the submission by various stakeholders – to the Ministry of Energy, a final report expressing the government's position is still under discussion.

The Ministry of Finance held a stakeholder meeting last month after receiving instructions from HC the case could be resolved. The court has now set August 2nd as the next court date.

The February circular of the RBI requires banks to finalize a resolution plan in case of default on large accounts of Rs 2,000 plus crore in 180 days (regardless of sectors), failing which the procedure of the RBI will be resolved. insolvency should be brought against the defaulter.

As the deadline for resolution of the first case series is late August, the electricity producers have requested an emergency measure. The circular also stipulates a one-day default rule on term loans, which prescribes the treatment of a borrower who misses repayments the next day.

Earlier, the Ministry of Finance had called for relief for all sectors. Sources said the ministry was of the opinion that lenders would have a year to finalize the resolution plan, instead of six months only, especially for infrastructure projects. Seeking special relief, power players have argued that most of the factors that caused the build-up of bad debts are beyond their control. A fifth of Rs 10.3 million rupees of gross non-performing badets of the banking system belongs to the electricity sector.

The Association of Electricity Producers has requested an extension of the deadline of August 2018 for the formulation, approval and implementation of resolution plans. Many badets stressed in February 2019 by extending the period from 180 days to 365 days.

Energy Minister RK Singh previously said that the timetable to implement a resolution plan was "impracticable"

the former joint forum of lenders with a system that justifies the l 39; unanimous agreement of all lenders to ratify any resolution plan, making things longer.