top of page
< Back

Question

What was the purpose of inter creditor Agreement signed by Indian Banks and Financial institution recently?
(a) To lessen the Government of India's perennial burden of Fiscal deficit and current account deficit.
(b) To support the infrastructure projects of central and state governments.
(c) To act as independent regulator in case of applications for loans of ₹ 50 crore or more.
(d) To aim at faster resolution of stressed assets of ₹ 50 crore or more which are under consortium lending.

Answer:

D

To suggest corrections, send feedback using feedback button in top menu.

To suggest corrections, use feedback icon on top menu.

Explanation:

The purpose of the Inter-Creditor Agreement (ICA) signed by Indian Banks and Financial Institutions is to facilitate faster resolution of stressed assets. It applies to cases where multiple lenders have exposure of ₹ 50 crore or more to a borrower under consortium lending. The agreement aims to establish a coordinated approach among lenders to come up with a resolution plan for the borrower, which may include debt restructuring, asset sale, or change in ownership. The ICA is designed to promote accountability, transparency, and collective action among lenders, ultimately leading to more efficient resolution of stressed assets in the banking system.

0

How was this explanation?

bottom of page