Debt relief: Supreme Court asks RBI to address power companies’ woes

Even as the Centre and the RBI show reluctance to widen the ambit of post-pandemic loan relief to borrowers and banks seem disinclined to artificially suppress their stressed assets, the Supreme Court is still exploring if hard-hit industrial sectors could be given further succour.

The apex court on Thursday asked RBI to respond to the power producers’ demands for various benefits, including restructuring of their loans, under the recent central bank circular on debt recast.

Senior counsel Abhishek Manu Singhvi, appearing for the Association of Power Producers, made it clear that he was not seeking liquidity injections or any fiscal or other specific relief. “The power sector being an essential and abused segment just needs tweaking of the RBI circular to make it inclusionary so that the sector could avail the benefits of the scheme,” he said. Singhvi further said power sector NPAs have been the result of non-payment consumers (discoms). Stating that the generating companies, which are suffering the most, he said the total debt has risen to Rs 1.2 lakh crore.

The apex court bench comprising justices Ashok Bhushan, R Subhash Reddy and MR Shah also directed power producers to submit their suggestions to RBI. It also asked the Centre and RBI to file short submissions/suggestions and posted the matter for further hearing next week.

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