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Bankers Restless as SEBs Call for Another Restructuring

News

Bankers across the country are huddling in board rooms to discuss a problem they thought had been tackled years ago. But the financial rot in some state electricity boards (SEBs) has only worsened since banks restructured loans to these entities under the financial restructuring proposal (FRP) in September 2012

Source:- live mint

SNP Insight

Inability of state electricity boards to repay their debts due to inadequate fiscal space is worrying bankers due to increasing bad depts. Since banks have high exposure in the sector, they will have to think of recovery measures in order to recover the funds, which may include asset sale of SEBs and in turn may create a power crisis in the state. The need of the hour is to carve out a middle path for restructuring measures to be taken.

Source:- SNP Infra Research