The Reserve Bank of India (RBI) is preparing to draft a new circular on resolving non-performing assets, sources told CNBC-TV18 on Wednesday.

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The development comes after the Supreme Court on Tuesday struck down the central bank's February 12 circular on the resolution of stressed assets and declared it 'unconstitutional' and ultra vires.

The central bank is not opting to ask the apex court for a review of February 12 circular, said the sources, who did not want to be named, adding that the work had already begun on a new circular, however, the timeline was still uncertain.

The central bank has noted the SC's order stating that it cannot ask banks to take cases to NCLT without the government's nod, the sources added. According to the sources, the court did not object to the features of the circular except the bankruptcy clauses.

The apex court's order to strike down the Feb 12 circular came after the stressed power companies moved the court requesting it to cancel the RBI's dictate which had put a question mark over the future of these companies.

The circular had directed lenders to refer any loan account over Rs 2,000 crore under the Insolvency and Bankruptcy Code (IBC) if it is not resolved within 180 days of default. This translates the RBI allowed 180 days for debt resolution.

First Published:Apr 3, 2019 4:01 PM IST