Follow prudential norms when lending to discoms: Power Secy tells SBI

Power Secretary Alok Kumar says overall debt of the discoms at the end of FY20 was Rs 5.14 trillion, against a turnover of Rs 7.28 trillion

The Union Ministry of Power has pressed upon country’s leading bank, the State Bank of India, to follow the prudential norms while lending to the state-owned power distribution companies (discoms) that are in a financially beleaguered condition. The ministry had earlier urged the central banker Reserve Bank of India (RBI) to direct the public sector banks to follow strict norms while lending to the discoms.

The primary lenders to the discoms--state-owned NBFCs Power Finance Corporation and Rural Electrification Corporation (REC)--already follow the norms.

Power Secretary Alok Kumar in his letter has said, many discoms are facing solvency and liquidity issues