• The Indian Banks’ Association(IBA) has tweaked the Inter-creditor agreement (ICA) to keep it in line with the revised guidelines of the Reserve Bank of India (RBI) on stressed assets resolution announced on June 7.
• The Inter-creditor agreement (ICA) was framed by Sashakt Committee.
  

Revised norms:

• The revised norm had mandated that if there was a default by any lender, all lenders should review the borrower account within 30 days of the default.
• The 30 days period is termed ‘review period’, and to chalk out a resolution plan.
• It has been made mandatory for all the lenders to enter into an ICA within the review period.
• Any decision agreed to by lenders representing 75% by value of total outstanding credit facilities and 60% of lenders by number shall be binding upon all the lenders.

Project Sashakt:

• Project Sashakt was proposed by a panel led by PNB chairman Sunil Mehta.
• The idea is to help consolidate stressed assets.
• Bad loans of up to ₹50 crore will be managed at the bank level, with a deadline of 90 days.
• For bad loans of ₹50-500 crore, banks will enter an inter-creditor agreement, authorizing the lead bank to implement a resolution plan in 180 days, or refer the asset to NCLT.
• For loans above ₹500 crore, the panel recom­mended an independent AMC, supported by institutional funding through the AIF.