NEW DELHI: The Allahabad High Court declined to give private power companies any interim relief on the Reserve Bank of India (RBI) circular that tightened bad loan norms on Monday, the deadline for finalising resolution plans for the stressed assets.
The court suggested the government could use a special dispensation that has never been used before to give directions to the central bank. The high court has mandated insolvency proceedings by lenders against defaulting power projects. Executives said that insolvency proceedings, which kick in as RBIs 180-day deadline has passed, may lead to steep haircuts for lenders because of the low valuations of stressed projects.
Bankers said they have 15 days to start insolvency proceedings against…
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