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What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently? Correct Answer To aim at faster resolution of stressed assets of Rs 50 crore or more which are under consortium lending

The correct answer is To aim at faster resolution of stressed assets of Rs 50 crore or more which are under consortium lending.

  • The inter-creditor agreement is aimed at the resolution of loan accounts with a size of ₹50 crores and above that are under the control of a group of lenders.
  • It has been signed by 22 public sector banks, 19 private sector banks and 32 foreign banks and 12 major financial intermediaries like LIC, HUDCO etc.
  • It is part of the “Sashakt” plan approved by the government to address the problem of resolving bad loans.
  • The Intercreditor Agreement, a recommendation of the Sunil Mehta committee, aims to deal with bad loans as an attempt to speed up the resolution of stressed assets.

Related Questions

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Statements : Government has spoiled many top ranking financial institutions by appointing bureaucrats as Directors of these institutions.

Conclusions :
I. Government should appoint Directors of the financial institutes taking into consideration the expertise of the person in the area of finance.
II. The Director of the financial institute should have expertise commensurate with the financial work carried out by the institute.
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