APP requests RBI to relax the guidelines issued on stressed assets

The Association of Power Producers (APP) has written to the Reserve Bank of India (RBI) requesting a relaxation in the recent guidelines (released in February 2018) on stressed assets. As per the guidelines, even a one-day default in debt servicing for accounts with exposure of over Rs 20 billion would warrant formulation and implementation of a resolution plan within three months, or the cases will have to go to the National Company Law Tribunal. As per the APP, the new guidelines disincentivise loan restructuring in the power sector and seek the sale and change of control of assets of the stressed developers. The power minister has assured the developers that he would take up the issue with the Ministry of Finance in a recent meeting.