The existing bilateral debt recast schemes between banks and some power distribution companies may be aligned with the government-introduced debt restructuring scheme, Reserve Bank of India (RBI) suggested.
Last year, lenders entered into a debt restructuring agreement with power distribution firms in Uttar Pradesh, Rajasthan and Haryana — who together owe
Rs 84,220 crore or 44 percent of outstanding liabilities of all discoms.
However, later the central government announced the Rs 1.9-lakh-crore debt restructuring scheme for state-run power distributors.
Reports suggest that in an internal note, the central bank suggested that adopting the centre’s package by states be treated an ‘alignment’ and not an exercise amounting to a ‘second restructuring’ of the debt of the discoms.
Under RBI rules, if the failure of one debt recast programme is followed by another one, the assets must be declared as NPAs. The RBI wants to avoid this situation and so recommended suspension of the incipient restructuring without any definite reform obligation on the discoms.
Meanwhile, the Uttar Pradesh cabinet gave an in-principle approval for restructuring its bleeding power sector — the state’s discoms have accumulated losses of Rs 42,700 crore — by agreeing to the centre’s restructuring package.
Leave a Reply
You must be logged in to post a comment.