– Cancellation of coal block.
– Projects set up without Linkage.
As per the Revised Framework, the extant instructions on resolution of stressed assets such as Framework for Revitalizing Distressed Assets, Corporate Debt Restructuring Scheme, Flexible Structuring of Existing Long Term Project Loans, Strategic Debt Restructuring Scheme (SDR), Change in Ownership outside SDR, and Scheme for Sustainable Structuring of Stressed Assets (S4A) were withdrawn. The Joint Lenders’ Forum (JLF) as an institutional mechanism for resolution of stressed accounts has also been discontinued. Now, all accounts, including such accounts where any of the schemes have been invoked but not yet implemented, shall be governed by the revised framework.
Although the new guidelines have been termed as ‘harmonized’ and ‘simplified’ generic framework, yet they are far from being so. Prior to these guidelines, an asset was classified as NPA if a loan or an advance where interest or installment of principal remains overdue for a period of 90 days in respect of term loan. Similarly, stressed assets were accounts where there has been a delay in payment of interest and/or payment as against the repayment schedule on account of the financial difficulties of the borrower. Under the previous framework, failure of an asset to serve its debt obligation within the prescribed time was taken to be indicative of a developing stress of potential NPA and consequently, corrective measures of various grades i.e. rectification, restructuring, and recovery were the options keeping in view the totality of the situation.
However, the new regime has let go with all such measures and any failure beyond the duration of SMA (Special Mention Accounts) is supposed to directly and immediately invoke the provisions of a resolution plan, making the revival extremely difficult. The committee, therefore, recommended that in the interest of the economy in general and the Electricity Sector in particular, the revised guidelines should be “harmonized and simplified” in the real sense.