Lack of coal linkages, delay in payment from discoms and other regulatory issues impacted the power sector, Power Secretary A K Bhalla told ET Now today. However, there is scope for consultation on power NPAs and a few projects are under resolution too, he also said. A a high level committee on power would meet to discuss the case and the finance ministry will take a call on intervention under Section 7 of RBI Act, he added.
Allahabad High Court on Monday had refused to grant interim relief against RBI’s February 12 circular setting 180-day timeline for resolution of stressed assets or undergo insolvency process under the Insolvency and Bankruptcy Code (IBC).
“I agree that RBI has given lot of time to resolve stressed assets. Lenders should have concluded the resolution process for those that were started,” he also said. The lenders will have to follow procedure as per IBC act if there is no further intervention from the court, Power Secretary added.
The Supreme Court will now hear the matter on Tuesday on granting interim relief to power companies against the strict deadline. Banks will now have to file for insolvency proceedings against these stressed assets worth nearly Rs 3.8 lakh crore in the next 15 days.
According to Bank of America-Merrill Lynch (BofA-ML) estimate, banks have exposure of Rs 2.6 lakh crore from the power sector. Independent Power Producers Association of India (IPPAI) and the power ministry had earlier indicated that action against power companies could hurt the power sector altogether.