Coal India (CIL), effective 1 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 30 September 2024. The interest rates for the period till 30 September 2024 shall be charged as stated in the FSAs.