SEBI Reg. Investment Advisor

Download App

MoneyWorks4Me

RBI refuses to relax norms for setting up of ARC for stressed power assets

07 Sep 2018 Evaluate

The Reserve Bank of India (RBI) has refused the Power Ministry's request to give certain concessions for setting up of an Asset Reconstruction Company (ARC) for warehousing stressed assets to prevent distress sale of these plants. The RBI framework provided for strict timeline for resolution of these bad loans where debt is Rs 2,000 crore or more. It mandates insolvency proceedings to start in case no resolution plan is provided by lenders within 180 days of default. Setting up an ARC is a legal option available to avoid insolvency proceedings for these stressed power assets.

Power Secretary A K Bhalla said ‘an upfront valuation is required for taking assets into ARC. We have sought exemption from that. The ARC is required to make 15 per cent upfront payment to lenders. We were asking for exemption from that. These type of concession are not in the scheme of RBI.’ About setting up of the ARC by state-run lender Rural Electrification Corporation (REC) with other lenders to power projects, he said that the REC and lenders together will set up this ARC.

After setting up of the ARC, the stressed assets would be taken over by it to avoid insolvency proceedings under the Insolvency and Bankruptcy Code in the National Company Law Tribunal (NCLT) for five years to avoid any distress sale of these projects. Besides, the assets already moved to the NCLT under the code can also be resolved by the ARC. The REC had proposed to bring about 25,000 MW of stressed power projects under this ARC.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through: