A welcome development . #rbi fellows have little contribution for sector specific issues related to turn around management .
A central bank regulating, a banking sector with > 1 USD trillion exposure ,not having an expert panel is quite appalling .
It can be argued that it’s not the central banks obective or authority;
but if that’s so then how can they decide what’s OK? what works , in what conditions,changing scenarios , in which sector – to formulate guidelines , and change policy without taking into account solutions for changing ground reality.
The question I ask are this , should not some basic rules to be formulated for the future which with regard to lending public money by public sector banks to projects which are highly dependent in state and government policy .
Is not renewable euphoria similar to coal ? The past is calling
1. PPAs with pricing linked to fuel costs be mandatory and gteed by state /govt with a minimum IRR. This cost needs to be a pass thru for utilities.
2.Pollution control equipment be provided at subsidised costs for life of project with price escalation be a pass thru via the PPA arrangement
3.Fuel supply price escalation clauses be a pass thru by the gteed PPA and the supply of not gteed domestically , imports will filing the gap .
The problems of infrastructure projects are more bad policy of governments than bad banking .