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'Dabhol power not an NPA under RBI's new laws'

The IDBI-led Indian lenders of the crisis-ridden Dahbol Power Company said on Wednesday that their investment in the power project could not be considered as non-performing assets under the new Reserve Bank of India guidelines.

State Bank of India deputy general manger D K Praksh told UNI that the lenders had sought protection under category two of the project under implementation clause of the RBI's revised guidelines on the ''Income recognition, asset classification and provisioning pertaining to the advance portfolio''.

''Though, the new guidelines have defined a non-performing asset where, 'interest and/or installment of principal remain overdue for a period of more than 180 days in respect of a term loan'. But, it has left a room for special provision for the projects under implementation,'' he said.

So, in spite of DPC not paying interest for the two consecutive quarters its assets could not be treated as NPA as the financial closure was yet to be achieved in this case, he added.

The Indian lenders have an exposure of Rs 6,200 crore (Rs 62 billion) in the Rs 13,000-crore (Rs 130 billion) DPC power project.

The first phase of the power project, which produced power for eight months, stopped operations last year only when the Maharashtra State Electricity Board rescinded the power purchase agreement. The DPC has not been paying interest on the loans to the financial institutions and banks since January this year.

IDBI had reportedly sought RBI's permission for granting special status to DPC project since the Hong Kong and Shanghai Banking Corporation has considered its exposure in the project as NPA and the SBI has treated its investments in the project as bad loans.

In view of all this, the SBI officials said both the phases of the DPC should be considered as a single project as a single power purchase agreement had been signed between MSEB and the Enron led- DPC.

UNI

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