Allahabad High Court refuses stay on RBI’s circular on stressed assets

The Allahabad High Court has refused to stay the Reserve Bank of India’s (RBI) circular dated February 12, 2018 regarding the time-bound resolution of stressed assets. The court also ruled that no coercive action can be taken against power producers until the scheduled hearing of the case on August 2, 2018. The MoP had sought key changes in RBI’s norms for identification and resolution of bad loans in the power sector. In a recently held meeting with the finance secretary, the power ministry suggested that stressed projects should not be categorised as stressed in a period of 90 days. Another change that has been recommended is the extension of the 180-day deadline to 270 days for the resolution of a bad loan. In addition, the MoP plans to write to the state distribution utilities asking them to clear about Rs 140 billion worth of dues to generation companies.

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