SC quashes RBI insolvency circular, relief for power assets worth Rs 2-trn

More than 24 stressed power projects that could have faced insolvency proceedings will now find it hard to get buyers because they are "incomplete"

The Supreme Court (SC) on Monday provided a huge relief to thermal power projects worth Rs 2 trillion that were facing the threat of insolvency. The apex court held a 12 February 2018 circular of the Reserve Bank of India (RBI), which ordered banks to classify companies as 'stressed' if they default on loans even for a day, to be 'ultra vires'. The SC said that the circular that applied to numerous defaulting assets in power, sugar, shipping and companies in other sectors to be beyond the RBI's legal powers. 

A detailed copy of the judgement is awaited.

The February