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PTC India Financial Services (PFS) has taken recourse to SARFAESI law to recover stressed loans from two power projects after the Centre in August explicitly allowed certain NBFCs to use this route for recovery of dues.
Managing Director & Chief Executive Officer Ashok Haldia told BusinessLine that while one project related to an Engineering, Procurement and Construction (EPC) player in power sector in Hyderabad, the other was for a hydro-electric project in Himachal Pradesh.
Haldia, however, declined to name the projects and loan exposure involved for which PFS has taken recourse to SARFAESI law.
PFS is probably the first infrastructure financing NBFC to have used the SARFAESI law. Till recently, only banks and financial institutions had recourse to the SARFAESI law.
"SARFAESI is a good tool. But it has to have enabling administrative system to expeditiously take over the assets and dispose them off", Haldia said adding that PFS may also take similar action if promoters of stressed projects are not found to be cooperating in overcoming stress.
Haldia also felt that infrastructure financing should be treated on different footing with regard to non-performing asset (NPA) recognition. Currently, for NBFCs, loans are recognised as NPA in case they are not serviced for 120 days. Beginning April 1 next year, loans extended by NBFCs will be recognised as NPA if they are not serviced for a 90-day period.
More number of days should be given before a loan is reckoned as, he said. Infrastcuture companies should be given a period of 120 or 150 days, as the reasons for assets facing stress could be many.
"Infrastructure financing has a risk profile altogether different than financing for non-infrastructure projects, working capital loans and the like.. Such (infrastructure financing) loans should therefore get more number of days before considered as NPA", Haldia said.
As regards his company’s NPA numbers, Haldia said, the stressed assets could be around ₹ 800-₹1000 crore. The problem is mainly from thermal projects, which in turn is more to do with the state of distribution utilites.
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