Thirty-six banks and financial institutions approved the Sashakt Committee`s recommendations. In this regard, the lenders jointly designate, in the agreement, a leading lender acting on behalf of the group as a whole. The lead lender will then be required to present the non-performing asset resolution plan (PNN) to the group and, if it gets the green light from two-thirds of the lenders, the proposal to settle the predetermined account will be considered. This agreement is terminated if there is a guide or order from the RBI or other regulatory or government authority to terminate it. The first review of progress under the creditors` agreement could be completed after three months. Under the agreement, dissenting lenders may exercise such a right of redemption for all facilities of other lenders concerned. In accordance with the Reserve Bank of India`s (RBI) Prudential Framework for Resolution of Stressed Assets, the Association of Indian Banks (IBA) has entered into an agreement between creditors (ICA) that provides details on lender meetings, voting issues, payments to dissenting lenders and additional financing. The agreement, as proposed by the Sunil Mehta Committee, aligned its procedures with all the immediate laws, rules and regulations of the country and the RBI. The ICA is signed by 22 public sector banks, including India Post Payments Bank, 19 private sector banks and 32 foreign banks. In addition, 12 major financial institutions, such as LIC and HUDCO, signed the agreement. 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.
“Almost the entire banking system and leading NBFCs such as the REC, the PFC join the ICA, which has abstained for decades in the past with a quick and effective resolution of stressed assets,” Goyal said, adding that several others, including ICICI Bank, would join the agreement after seeking board approval. “We finally have the banks that recognize the importance of working as a team to work together to find a solution to the banking problem and ensure an orderly flow of credit in the future,” he added. 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. 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. The agreement, as proposed by a committee led by the President of the National Bank of Punjab, Sunil Mehta, is a “big step forward” in solving the problem of stressed assets and was developed under the Insolvency and Insolvency Act (IBC), Goyal Reporters said on the sidelines of a conference organized by the Confederation of All India Traders (CAIT). On July 23, 2018, Indian banks and financial institutions signed an agreement between creditors to accelerate the liquidation of stressed assets of 500 kronor or more under syndicated loans. The ICA was established in accordance with the recommendations of the Sunil-Mehta Committee and under the auspices of the Association of Indian Banks (IBA). It is part of the Sashakt project, which aims to strengthen the credit capacity, credit culture and loan portfolio of public sector banks. The agreement was approved by the boards of directors of the lenders involved. The ICA was signed by 22 public sector banks, including SBI, PNB and India Post Payments Bank, 19 private banks and 32 foreign banks.