CIL makes interest rates uniform for delayed receivables

Coal India Limited (CIL), effective 1st October 2024, will be applying uniform interest rates on delayed amounts of receivables, adjustments and recoverable sums that remain outstanding after the due date. 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%. 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% and 14.85% 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 30th September 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.

Shares of Coal India Limited was last trading in BSE at Rs. 510.10 as compared to the previous close of Rs. 516.05. The total number of shares traded during the day was 180570 in over 11467 trades.

The stock hit an intraday high of Rs. 514.70 and intraday low of 502.50. The net turnover during the day was Rs. 91833992.00.

Source : Equity Bulls

Keywords

CoalIndia INE522F01014 Receivables Delay UniformInterestRate