Standard Post with Image

RBI’s circular may not help electricity sector in its revival prospects

<p><span style="font-size:11.0pt">RBIs February circular, to trigger insolvency proceeding on default of more than 180 days has put more than 66 GW of power projects to be NPA. RBI has disallowed for extension of deadline of 180 days, whereas power and finance ministries have supported private power companies in the Allahabad High Court in seeking an extension to the 180 days. </span></p> <p><span style="font-size:11pt">RBI in its report presented to Allahabad Court, has stated and favoured private utilities that exempting CPSUs from competitive bidding may deepen lack of PPA opportunities by states, as NTPC has tied up 40 GW of PPA and is poised to be main reason for stress in the sector.</span></p> <p><span style="font-size:11pt">RBI&#39;s revised guidelines dismayed private players and banks may soon experience rise in NPAs. This may hinder development in the power sector, as power Industry is considered as core of economy development.</span></p>