Banking secretary Rajiv Kumar will hold a meeting with banks, power companies, and senior officials of Reserve Bank of India and related ministries on June 21 to discuss the banking regulator’s new norms on stressed assets in relation with power projects, as directed by the Allahabad High Court.
The meeting is likely to be attended by officials of ministries of power, oil, and finance, a senior government official said.
The high court had in a ruling on May 31 directed the finance ministry to hold a meeting of other stakeholders in June to find whether the issues of stressed power projects facing insolvency proceedings could be resolved.
“…action may be avoided on the basis of the impugned circular dated 12.2.2018 issued by respondent no. 2 — Reserve Bank of India addressed to all scheduled commercial banks and all-India financial institutions, against members of the petitioners association, subject to condition that the member(s) is/are not wilful defaulter(s) till the meeting is conducted by the secretary, ministry of finance, Union of India,” the high court had directed.
The petition was filed by Independent Power Producers’ Association of India, which represents some stressed power projects facing the threat of being pushed into insolvency proceedings under the RBI circular mandating early detection and resolution of stressed assets.
Besides the RBI circular ‘Resolution of Stressed Assets — Revised Framework’ issued on February 12, the meeting is also likely to discuss debt resolution schemes floated by State Bank of India (SBI) and Rural Electrification Corp (REC), said the government official cited earlier.
SBI’s Scheme of Asset Management and Debt Change Structure, or Samadhan, proposes sale or takeover of the stressed assets to prevent them from going into liquidation.
ET had on June 5 reported that a consortium of lenders led by SBI has identified 11plants of companies including Lanco Infratech, Jaiprakash Associates and Avantha Group of 12,910-MW capacity for takeover under the scheme.
Power minister R K Singh last week said REC has also proposed a warehousing plan to revive stressed power assets. The Power Asset Warehousing & Revitalisation scheme, or Pariwartan scheme, proposes floating of an asset management company to takeover stressed assets at book value.
Finance minister Piyush Goyal had met power minister R K Singh and senior officials of power ministry and banks on Monday to hold preliminary discussions on the Allahabad High Court order. The ministers had held brief discussions on the schemes.
News Source: Economic Times