India is preparing a bailout exceeding INR 1 tn (USD 12 bn) for debt-laden state-run electricity distribution companies, planning to push long-delayed reforms in the country’s weakest energy link, Reuters reports, citing unnamed government sources. States seeking funds will need to either privatize their utilities or list them on stock exchanges.

Reform-linked funding window: The Power Ministry’s new proposal — accessed by Reuters and likely to be announced in the 2026 budget in February — offers low or zero-interest federal loans. To qualify, states must agree to privatize by transferring managerial control or minority stakes, ensure private firms supply at least 20% of total power, and assume part of distributors’ debt. States unwilling to privatize must list utilities within three years for aid.

Mounting losses: India’s state-run power distributors have accumulated losses of INR 7.08 tn (USD 80.6 bn) and debt of INR 7.42 tn (USD 84.4 bn) as of March 2024, the newswire adds. Past bailouts failed to stem losses, but the new plan is to draw in private players such as Adani Power, Tata Power, and Torrent Power to improve efficiency.

CENTRAL BANK PITCHES EASIER OVERSEAS PAYMENTS-

The Reserve Bank of India (RBI) has proposed new measures to accelerate cross-border payment inflows and reduce settlement delays, Reuters reports. In a draft circular released on its website, the central bank states that banks must ensure that payments received during foreign-exchange market hours are credited to beneficiaries on the same day, while those received after hours should be credited on the next business day.

Process upgrade: The RBI also proposed that lenders adopt “straight-through” automated processing to enable faster crediting once risk checks are cleared, and urged banks to offer digital platforms that allow customers to upload documents and track remittances. The central bank said the measures aim to address delays between receipt of funds and credit to accounts. Stakeholders have been invited to submit feedback by 19 November.

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