New Delhi: The State Bank of India (SBI) is in advanced stages of the resolution process for seven or eight stressed power sector accounts involving a total debt of around 17,000 crore, managing director Arijit Basu said on Friday.

If it goes through, this will provide banks with a resolution option that may lead to a smaller haircut compared to the resolution process under the Insolvency and Bankruptcy Code.

SBI, as the lead bank, is in talks with other banks over the potential resolution, Basu said on the sidelines of the India Banking Conclave.

“There were around 35 projects that were identified by the government and where there was significant stress. Many of these have been resolved. There were issues around power purchase agreements, fuel supply agreements. Subsequently, we looked at 13 accounts where we could put it under a scheme which would entail certain changes in the management and an external investor coming in," Basu said.

“In that, for around seven to eight accounts, we have been able to get some consensus with the banks. We have done technical due diligence and financial rating for the sustainable debt. Investors have expressed interest," he said.

Basu added that the 27 August deadline will not trigger a spurt in cases being referred to National Company Law Tribunal, at least those involving SBI.

The Reserve Bank of India had set a deadline of 27 August for settling cases involving defaulting power plants failing which they will be referred for bankruptcy proceedings.

Power is one of the highly stressed sectors with close to 1 trillion of loans having turned sour or been recast. Around 66 gigawatt capacity of independent power producers is facing various degrees of financial stress. This includes 54.8GW of coal-based power (44 assets), 6.83GW of gas-based power (nine assets) and 4.57GW of hydropower (13 assets).