Inter Creditor Agreement By Indian Banks

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In addition, 12 major financial institutions, such as LIC and HUDCO, signed the agreement. Adjust your preferences and receive a personalized story recommendation based on your interest. The ICA, developed by the banks themselves, reflects the bankers` determination to work together to find a solution to the problems of the banking sector, he said. “There have been many occasions when a good resolution plan, which would have helped save jobs, save domestic assets and recover large amounts of loans, has been blocked for months and years by one or two creditors,” he said. Each lender ensures that at each lender`s meeting, it is represented by competent and competent people to make decisions on the spot without deferring them for internal authorization. Thirty-six banks and financial institutions approved the Sashakt Committee`s recommendations. The Association of Indian Banks is expected to begin formal discussions with the wider banking fraternity over the next 14 days. “The three-month moratorium and the fact that a one-time restructuring may be necessary triggered this retrospective,” said a senior banker. Under current regulations, if the banks fail to find a solution, the issue is referred to the National Corporations Act… The Indian Banks` Association has adapted the Inter-Creditor Agreement (ICA) described by the Sashakt Committee to bring it into line with the Reserve Bank of India`s (RBI) revised guidelines on the dissolution of stressed assets announced on June 7. India`s banks and financial institutions (FIs) reached an inter-creditor agreement (ICA) on Monday to speed up the resolution of non-performing assets (NPAs) or non-performing loans and ensure a smooth flow of credit, Acting Finance Minister Piyush Goyal said.

Under the agreement, dissenting lenders may exercise such a right of redemption for all facilities of other lenders concerned.

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