The Supreme Court’s order Tuesday striking down as unconstitutional the Reserve Bank of India’s February 12, 2018 circular on the resolution of stressed assets is a significant victory for power and infrastructure companies. The revised framework for loan resolution, which defined a one-day default norm in line with the Insolvency and Bankruptcy Framework, is commonly referred to as the “February 12 circular”. AdvertisingAround 50 petitions by power, shipping and sugar companies were filed challenging the RBI circular. The total value of loans affected by this circular is estimated at around Rs 3 lakh crore. The Indian Banks Association had also sought relaxation in these norms from the RBI for infrastructure and power companies.

Source: Indian Express April 02, 2019 09:22 UTC