An Indian court rejected a plea by the nation’s power producers to exempt generators from central bank’s rules on repaying loans, according to the Independent Power Producers Association of India, Bloomberg News reported. The court’s order allows lenders to start bankruptcy proceedings against defaulting generators. The court asked the government to discuss with the Reserve Bank of India on possibilities of relaxing the rules for the power sector, Harry Dhaul, director general of the lobby group, said by phone. In February, India’s central bank, battling the world’s worst bad-loan ratio after Italy, introduced new rules, ordering lenders to restructure stressed debt within 180 days. Creditors were asked to initiate bankruptcy proceedings after the deadline, which ends Monday. Power generators, led by IPPAI, had challenged the RBI rules, citing cash-flow woes that make timely debt-servicing difficult. The court also directed a government panel examining issues including fuel allocation, bad loan norms and regulations to come up with its report in two months, he said.
