RBI's Feb 12 circular: Infrastructure, power companies were hit hardest

The circular prohibited loan restructuring and asked banks to declare a company a non-performing asset even if there was a day's delay in loan repayment

The stringent Reserve Bank of India circular that was issued on February 12 last year and which imposed tough loan conditions on lenders has hit hard infrastructure and power companies.

The circular prohibited loan restructuring and asked banks to declare a company a defaulter even if there was a day’s delay in loan repayment. 

Though bankers said the circular helped them to rein in erring promoters, chief executive officers are waiting for the Supreme Court, which is slated to hear petitions filed against the circular, to give them a reprieve. 

Several companies including Anil Ambani’s Reliance Communications filed for bankruptcy