Supreme Court order on NPAs a relief for power companies

RBI's February 12 circular explained

"The order of the Supreme Court mandates RBI to exercise its powers under Section 35AA "in respect of specific defaults by specific debtors".

The Supreme Court on April 2 strikes down the Reserve Bank of India's circular on resolution of stressed assets.

The notice came on the heels of banks finalising resolution plans for the "Dirty Dozen", a list of 12 Indian companies that went bankrupt and qualified for immediate resolution. Some had even challenged the validity of the RBI's directive saying its "one-size-fits-all" did not account for external factors.

It also provides a breather for companies in the sugar, shipping, infrastructure and textile sectors which were under pressure, said several bankers and lawyers. The government had earlier asked the RBI to make sector-specific relaxations in the timeline for the implementation of the circular.

RBI's February 12, 2018, circular had said that the banks would have to seek resolution under the Insolvency and Bankruptcy Code (IBC) if a borrower fails to pay the due amount within a period of 180 days of first default. "So, we will do all that is possible to ensure that the pace is maintained", he said. The decision caused panic for many companies, in particular those in the power sector.

A Parliamentary Standing Committee on Energy report tabled a year ago had said some 40,000 megawatts of stressed power capacity across 34 projects were at risk simply because of external factors such as fuel shortage, sub-optimal loading of coal, absence of fuel supply agreements with state-run monopolies and lack of power purchase agreements signed by states who were the sole buyers of electricity in most cases. The National Company Law Tribunal (NCLT) would also be involved in insolvency proceedings against the defaulting companies within 15 days of the six-month deadline.

Adam Sandler Will Host 'Saturday Night Live' for Very First Time
But Sandler's lack of hosting has nothing to do with any secret Lorne Michaels feud, and everything to do with Sandler himself. Deeds, and numerous pointedly silly comedies that defined the '90s and '00s. "It was the end of the run for us", he said .

"Voiding of the February 12 circular is credit negative for Indian banks", said Srikanth Vadlamani, vice president, Financial Institutions Group, Moody's Investors Service.

The rationale behind the RBI's February 12th circular was to tighten the noose on cash-strapped companies and force banks to account for bad loans immediately.

The agency had also said 92 percent of this debt were classified as NPAs by banks as of March 2018 and also made provisions of over 25-40 percent on these accounts.

RBI keeps a capital buffer of over Rs 9.4 lakh crore now, which a section in the government feels is too high and thus should be parted with for better productive deployment like funding the cash-starved state-run banks or cash-crunched power distribution companies.

"However, Crisil said: "... a return to the pre-IBC era is not expected".

Related News:

Most liked

Pair of Tigers under the weather at Final Four
The 2009 Tar Heels beat Michigan State to win the program's fifth national title with KenPom's No. 1 rated offense. At least three players are battling illness heading into the No. 5 ranked team's match-up against No. 1 Virginia.

Billy Ray Cyrus Joins Lil Nas X for 'Old Town Road' Remix
Now, Billboard looks even more smarmy for branding it "not country". "I believe Young Thug would be one of the biggest pioneers in that".

Every free NES game added to Nintendo Switch Online in April 2019
The good news is that you can totally avoid this disappointing situation by always keeping a second controller handy for backup. Your mission is to halt a galactic invasion masterminded by Starbrain, a giant computer inhabiting a floating space station.

Poor Diet Linked to 1 in 5 Deaths Globally
However, they're encouraging people to focus more on adding healthy foods to their diets, rather than punishing them for eating fat and sugar.

The island of Komodo is closing because crooks keep stealin' dragons
They can only be found in Indonesia , so the country made a decision to open a preserve for the animals, Komodo Island. Even if Komodo Island closes, visitors will still be able to see the dragons at the parks other islands.

Air pollution to shorten children's lives by 20 months, report says
The State of Global Air 2019 report looks at how long-term exposure to outdoor and indoor air pollution has affected health. The report has highlighted the close relationship between exposure to air pollution and death from type 2 diabetes.

Apple's Not Sure Intel Can Supply 5G iPhone Modems
Therefore, it shouldn't come as a surprise that the insider source is claiming that the relation between Apple and Intel is tense. After Apple's employees have done designing the modem chip, then the fabrication will be handled by either TSMC or Samsung .

Smollett's lawyer warns Chicago not to sue 'Empire' actor
Smollett admitted no wrongdoing, but he did agree to do some community service before charges were dropped . The actor missed a city-imposed Thursday deadline to pay or face further legal action.

Venezuela's ANC strips Juan Guaido of parliamentary immunity
Tuesday night's vote was unanimous. "They don't have the slightest idea of what the consequences of war are for a country".

Yankees place Giancarlo Stanton on injured list with biceps strain
His lack of performance led the coaching staff to question whether German should serve as an opener or remain a reliever. The negative angle is "how many injuries can this team withstand?" Tyler Wade has been recalled to fill the roster spot.

Apple puts iPhone XR on massive discount of Rs 24,500
Apple iPhone XR has all the features of iPhone XS, though it does not have an OLED display or dual camera setup at the back. While this is the price for 64GB variant, the other two variants have also seen a temporary price drop.

Apple lowers HomePod, iPhone XR prices - Apple Inc. (NASDAQ:AAPL)
Apple also seems to have cut HomePod prices by roughly 15% in other regions where the HomePod is available, according to 9to5Mac . Apple's smart speaker is available in the U.S., Australia, Canada and the United Kingdom , as well as Germany and France .

Windows 10 May 2019 Update gets official, late-May planned release
New label criteria have also been rolled to aid in the Windows teams use of ML modeling to better differentiate devices. As for the updates themselves, there are efforts underway to better weed out bugs before they become a problem.

Chinese Woman Arrested at Trump Resort With Malware on Thumb Drive
The newspaper said the ongoing investigation also has focused on Li "Cindy" Yang, a South Florida massage parlor entrepreneur. "Frankly, what we're doing with cyber is a story in itself", the US President said. "The apparent ease with which Ms.

United Nations chief warns of risk of confrontation in Libya
The U.N.'s Gutteres said in a tweet he was deeply concerned by the military movements and the risk of confrontation. The LNA spokesman, Ahmed al Mismari, said "our men were given a celebratory welcome by local residents".