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SC orders status quo on RBI’s February 12 circular
Why in the news ?
- The Supreme Court on Tuesday ordered status quo on the implementation of a February 12 circular of the Reserve Bank of India which mandates insolvency proceedings for a debt servicing default beyond 180 days.
Details
- The circular, in a bid to efficiently realise bad loans, is part of a revised RBI framework.
- Power firms have argued that the provision was unfair as their debt repayment capacity was directly linked to revenue from power distribution companies and availability of coal, a natural resource closely regulated by the State.
- The circular had said the revised framework was meant for resolution of stressed assets in the economy.
Source
The Hindu.