Inter Creditor Agreement Hindu

Having regard to the press release of the Indian Banks Association (IBA) under the Inter-Creditor Agreement for the Resolution of Stressed Assets (ICA). Since creditors are unable to agree on the buyer or restructuring mechanism, it often takes several weeks to reach a consensus. ICA`s last signing date was January 7 for loans of Rs 2,000 crore. The banks had asked the regulator to extend the three-month deadline so that cases that are about to be referred are not referred to the NCLT. The conditions for a complete reorganisation of banks` inter-creditor agreements (ASICs) are met following the suspension of new cases under the Insolvency and Bankruptcy Code (IBC). Such an agreement could convince banks to tackle a plan to resolve stressed assets more quickly. This is an improvement over the previous model, which relied exclusively on the forum of joint lenders to reach consensus among creditors. It is indeed logical that joint lenders who want to avoid a blockage agree on the fundamental rules of debt management before assigning them to a borrower. However, the requirement for the lead lender to establish a temporary resolution plan may have unintended consequences. Banks may be forced to quickly sell stressed assets due to arbitrary timelines for the resolution process.

This is for the interests of lenders eager to get the best price for their stressed assets. In addition, it is often in the interest of the majority of creditors to take the time to get the most out of their assets. Meanwhile, the main obstacle to resolving bad loans is the lack of buyers likely to buy stressed assets from banks and the unwillingness of banks to sell their loans at a deep discount on their face value. If the government is unable to address this issue, the problem of non-performing loans is unlikely to be solved for some time. Tailor your preferences and receive a personalized recommendation of stories based on your interest. The Indian Banks` Association has optimized the Inter-Credit Agreement (ICA) formulated by the Sashakt Committee to keep it in line with the Reserve Bank of India`s (RBI) revised guidelines on the resolution of stressed assets announced on June 7. . .