An electrical transformer stands behind a power plant in Paradise, Kentucky, U.S. (Photographer: Luke Sharrett/Bloomberg)

Resolution Soon On Stressed Power Assets Worth Rs 17,000 Crore, Says SBI MD

State Bank of India Ltd. managing director Arijit Basu said that about 7-8 power sector projects worth Rs 17,000 crore are expected to be resolved soon as lenders are nearing consensus on these.

“There are investors who have expressed interest and we are in very very advanced stage as far as these accounts are concerned. Some of these we should be able to conclude very soon,” said Basu. “We don’t see major spurt in accounts being referred to National Company Law Tribunal. We have been bringing out the stress in the system. We have worked at resolution. We have not waited for deadline,”

There are about 34 stressed power projects and the combined value of their outstanding loans is about Rs 1.74 lakh crore.

The Reserve Bank of India, in February, mandated banks to identify projects with even a day’s default as stressed asset and conclude the resolution proceedings in 180 days. The circular came into effect on March 1 and the 180-day deadline concludes on Aug. 27.

Also read: RBI’s Stressed Asset Framework Will Worsen Power Sector Crisis, Says Parliamentary Panel 

On provisions against non-performing assets, Basu said that some guidance has been given and the bank has already provided for them significantly in the first quarter and will continue to provide as per the norms. “As far as recoveries are concerned this particular financial year has been significantly better than what we were doing in 2017-18. It is almost 80-90 percent more than what we were doing in 2017-18.”

SBI is a well governed bank with a very strong board, he said when asked about talks of public sector banks being given more autonomy.

Also read: Finance Ministry Suggests Forming Panel To Tackle Stressed Power Assets