The February 12 circular aims at quick reporting of defaults, resolution plan for defaulting companies and a time-bound referral of defaulting companies to the National Company Law Tribunal (NCLT) and makes it mandatory to map an account as NPA even on a single-day default.
Power sector companies had challenged the the February 12 circular in the Allahabad High Court. The court had asked RBI to look at an option to exclude them from the one-day default or offer some special dispensation.
However, the RBI ruled out any changes and challenged the High Court decision in the Supreme Court where the matter is pending now.
The February 12 circular talks of a 180-day timeline whereas Project Sashkat only ensure how the process during the 180-day timeline is efficient.
Project Sashakt was proposed by a panel led by PNB chairmen.It suggested bad loans of up to ₹ 50 crore will be managed at the bank level, with a deadline of 90 days. For bad loans of ₹ 50-500 crore, banks will enter an inter-creditor agreement, authorizing the lead bank to implement a resolution plan in 180 days, or refer the asset to NCLT. For loans above ₹ 500 crore, the panel recommended an independent asset management company , supported by institutional funding through the Alternative Investment Fund.