Group resolves project issues
A number of steps have been taken by the Government to help revive stalled projects, Anurag Thakur, Minister of State for Finance, has told Lok Sabha on 15 July 2019.
A project monitoring group has been set up and is working as an institutional mechanism to resolve a variety of issues, including fast-tracking of approvals.
Till 1 January 2019, more than 3,191 issues raised pertaining to 725 projects with anticipated investment of Rs.29.88 lakh crore had been resolved.
He said that 513 inter-ministerial meetings and 247 meetings with Chief Secretaries of States had been held for resolution of related issues/clearances.
Further, inter-ministerial groups were constituted by the nodal ministries concerned for the shipping, textile, power, telecommunications, renewable energy and MSMEs sectors to examine systemic issues affecting viability and repayment capacity of the sectors, said Thakur.
Meanwhile, the Reserve Bank of India (RBI) had issued a circular on Resolution of Stressed Assets — Revised Framework on 12 February 2018.
RBI has informed that Supreme Court, vide its order dated 2 April 2019, held the said circular as non-est, necessitating issue of a revised circular for expeditious and effective resolution of stressed assets.
RBI has further informed that against this background it has issued on 7 June 2019 “Prudential Framework for Resolution of Stressed Assets” for early resolution of stressed assets in a transparent and time-bound manner. This gives complete discretion to lenders with regard to design and implementation of resolution plans, while providing for disincentives in the form of additional provisioning for delay in implementation of resolution plan or initiation of insolvency proceedings, and making mandatory the signing of an inter-creditor agreement, providing for majority decision-making by all lenders.
Separately, the Indian Banks’ Association (IBA) said the Prudential Framework issued by RBI vide the circular dated 7 June 2019 has made signing of inter-creditor agreement mandatory before working out the resolution proposal for a particular stressed account.
The IBA, in this connection, has drafted an inter-creditor agreement and circulated the same among its member banks to facilitate the resolution process.
IBA has further apprised that this draft agreement is not with reference to any particular sector, including the power sector, said Thakur in the written reply to the House. fiinews.com