Inter- creditor operational norms to come out soon
Mumbai, Aug. 21: The Sunil Mehta- led panel will soon come out with the operational guidelines for banks and other financial institutions which have the signed the inter- creditor agreement ( ICA) providing details about the timelines to be followed by the signatories to resolve their stressed loans.
Since July 23, 22 public sector banks ( including the soon- to- be- launched India Post Payments Bank), 19 private sector banks and 32 foreign banks have signed the ICA. Besides, 12 major financial intermediaries like LIC, Hudco, PFC and REC have also become its signatories.
The ICA, under the Project Sashakt, seeks to resolve loans under ` 50 crore or more which are under consortium lending but under ` 500 crore.
“We will soon come out with the operating guidelines. We have already drafted it and in a couple of days, we will be circulating it to the banks. Once 66 per cent of banks agree to this, the operating guidelines will become enforceable,” SBI deputy managing director ( global markets) C. V. Nageswar, who is one of the members of the panel, said here on Tuesday.
The operating guidelines will be for the lead lender and for the steering committee that the Indian Banks Association is going to form, and will detail the timelines on what needs to be done, Mr Nageswar said on the sidelines of the national banking summit organised by the Ficci and IBA.
“If you have to do a resolution plan then we need to do the valuation, we need to call the investment bankers who can give the resolution plan and voting mechanism,” he added.