Team News Riveting
Kolkata, September 30
Coal India Limited (CIL) will be applying uniform interest rates on delayed amounts of receivables, adjustments and recoverable sums that remain outstanding after the due date with effect from October 1.
Earlier, the interest rates were skewed with wide variances even for the same generating company that had different Fuel Supply Agreements (FSAs) with CIL. The policy tweak is for coal sold under different FSAs and schemes. This is yet another consumer friendly approach by CIL enabling ease of business.
CIL’s Board had given its nod for the parity in the last week of July 2024, amending the definition of interest rate mentioned in the body of FSAs. CIL’s revised interest rate is Repo Rate of Reserve Bank of India as applicable on the due date of payment plus 3 per cent. This would be much lower than earlier rates easing the customer stress. Prior to the revision, interest rates for delayed payments used to hover between 9.5 per cent and 14.85 per cent under several FSAs. Repo rates are reviewed by RBI on quarterly basis.
The new interest rates are applicable for the delay in payments beyond 30th September 2024. The interest rates for the period till September 30, 2024 shall be charged as stated in the FSAs. Taking cognizance of representations by coal consumers who sought revision in the lopsided interest rates, CIL had levelled the differences and brought in a uniform rate.
Differently ranged bank lending rates was also viewed as a factor that may be disputed by the customers while paying interest on late payment. RBI Repo rate being a benchmark and periodically reviewed by the country’s Central Bank, was considered in making a uniformly applicable rate of interest across different types of FSAs.
CIL’s long term coal supplies to different customers are made under FSAs. For FY 2025 CIL’s total annual contracted quantity (ACQ) under three FSA types is 705.7 MTs. As per pre New Coal Distribution Policy FSAs are to the tune of 226.3 MTs, whereas Post NCDP including SHAKTI and non-regulated sectors account for 476.3 MTs. SHAKTI B (iv) and B(v) constitute 3.1 MTs.
Recently CIL has introduced a slew of friendly measures easing the policies for its customers.
