Banks are working on a plan to resolve Rs 70,000 crore worth of non-performing assets (NPAs) in the power sector through operation and maintenance (O&M) contracts, a senior banker said on Tuesday. A senior executive at State Bank of India (SBI) said, \u201cThere are 10 such projects which we have to resolve in the next few months. These resolution plans are being worked out under RBI\u2019s (Reserve Bank of India) February 12 circular.\u201d In February, the central bank had said a one-day default in debt-servicing for accounts where banks\u2019 exposure is over Rs 2,000 crore would warrant formulation and implementation of a resolution plan. If failed, within three months, the cases will have to be referred to the National Company Law Tribunal (NCLT) for insolvency proceedings. The mode of resolution for power assets will involve determining the \u201csustainable debt\u201d levels of completed plants with existing power purchase agreements (PPAs) and coal supply arrangements. On May 5, FE had reported that companies whose power projects may be rated by credit rating agencies include KSK Mahanadi, Indiabulls, GMR, Avantha, Essar and Lanco. Stressed assets in the power sector have been a cause for concern for banks after a chunk of troubled assets in the steel sector \u2013 the other significant source of stress \u2013 took the Insolvency and Bankruptcy route to resolution. Lack of PPAs and other structural issues have led to many power projects defaulting on loan repayment obligations. On Tuesday, SBI said power-sector loans worth `10,575 crore sit on its watchlist of loans for FY19, which includes all corporate special mention account (SMA)-2 loans and stressed SMA-1 loans. Earlier this month, Union Bank of India had told analysts that it may see slippages worth `5,000-6,000 crore in the power sector in FY19.