CIL allows LC as payment for coal instead of cash

"In order to provide relief to the power sector consumers and increase liquidity in the system, CIL has allowed the facility of Usance Letter of Credit  to power sector consumers for payment of coal instead of cash advance for the Fuel Supply Agreements (FSA). This shall  help significantly in improving the working capital cycle of the generators," a statement from the coal ministry said.

Apart from power sector consumers, CIL has also introduced the same mechanism  for customers of Non-Power Sectors from this month.  This shall be a big boost to the liquidity in the markets and at the same time shall also provide the much anticipated relief to the consumers of coal.

CIL is supplying about eighty percent of its coal to Power Sector consumers and 550 Million Tonne (MT) coal has been offered for power sector in the current year 2020-21.