Coal India has decided to ease payment terms for its customers, particularly for those in the stressed power sector, and be lenient in dealing with defaults. It will also accept ‘usance’ letters of credit, a Coal India executive said.
“This is also referred to as deferred payment letters of credit, which will allow consumers in the power sector to get deferred payment option for coal value by paying service charge to its banker. The banker makes instant payment to Coal India,” said a senior Coal India executive.
“It is for power consumers with valid fuel supply agreements, and the tenure of the credit will depend on the bargaining power of the generator with the bank and can range from a month to three months.” He said power customers sought a three month payment moratorium but this is not possible as dues from the sector are already at Rs 13,000 crore.
In view of transportation and labour problems during the lockdown, the company has also relaxed rules that give customers a specified time for loading of coal. “Under normal circumstances, payments are to be made once or twice a month for contracted coal consumers on presentation of invoice by the producer. Delay in payment attracts penalties and additional supplies are restricted,” the executive said.
“It has been waived for the current period of lockdown for power consumers. They may be offered additional coal even if they default on payment during the lockdown.”