Mumbai, Apr 23 (IANS): The Indian Banks Association (IBA) has submitted a memorandum to the Reserve Bank of India (RBI) on resolution of stressed assets.

The central bank is working on a revised circular for the Resolution of Stressed Assets after a Supreme Court's direction on April 2.

In its April 10 memorandum, the IBA recommended and pitched for:

a. Threshold of 90 per cent by value for approval of Resolution Plan by lenders against industry demand of aligning with IBC threshold of 66 per cent.

b. A period of 240 days for preparation, approval and implementation of Resolution Plan against industry demand of at least of 360 days.

3. Power and Infra projects involve large lending consortia involving number of banks and financial institutions.

4. Probability of achieving approval of RP significantly lower with higher threshold of 90 per cent

5. Will lead to large number of stressed assets getting referred to NCLT under IBC, eroding value for the stakeholders

6. Power and Infrastructure sectors are heavily regulated

7. Government counter-parties unable to provide even contractually permissible relief pending regulatory dispensations

8. Regulatory resolutions are inordinately delayed for 1-3 years

9. Industry is demanding realistic approval threshold and period for preparation, approval and Implementation of Resolution plan