{"id":91692,"date":"2025-06-01T11:02:44","date_gmt":"2025-06-01T11:02:44","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91692"},"modified":"2025-06-01T11:02:44","modified_gmt":"2025-06-01T11:02:44","slug":"what-was-the-purpose-of-inter-creditor-agreement-signed-by-indian-bank","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/what-was-the-purpose-of-inter-creditor-agreement-signed-by-indian-bank\/","title":{"rendered":"What was the purpose of Inter-Creditor Agreement signed by Indian bank"},"content":{"rendered":"

What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?<\/p>\n

[amp_mcq option1=”To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit” option2=”To support the infrastructure projects of Central and State Governments” option3=”To act as independent regulator in case of applications for loans of \u20b9 50 crore or more” option4=”To aim at faster resolution of stressed assets of \u20b9 50 crore or more which are under consortium lending” correct=”option4″]<\/p>\n

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This question was previously asked in<\/div>\n
UPSC IAS – 2019<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe Inter-Creditor Agreement (ICA) was signed by major Indian banks and financial institutions as part of the ‘Sashakt’ scheme for resolving stressed assets, particularly large value Non-Performing Assets (NPAs) under consortium lending (where multiple banks have lent to the same borrower). The ICA aims to facilitate faster decision-making among lenders regarding resolution strategies (like restructuring, liquidation, change in ownership, etc.) for stressed accounts involving multiple creditors, especially those with total exposure of \u20b9 50 crore or more. This helps avoid delays in resolving bad loans which arise when multiple banks with different stakes and priorities are involved.
\n<\/section>\n
\nThe Inter-Creditor Agreement is a mechanism among lenders to speed up the resolution of stressed assets under consortium lending.
\n<\/section>\n
\nThe ICA streamlines the process by allowing a decision agreed upon by a certain majority of creditors (by value of debt) to be binding on all other creditors who are part of the agreement. This prevents minority creditors from blocking resolution efforts and aims to maximize recovery value from stressed assets, complementing existing frameworks like the Insolvency and Bankruptcy Code (IBC).
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently? [amp_mcq option1=”To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit” option2=”To support the infrastructure projects of Central and State Governments” option3=”To act as independent regulator in case of applications for loans of \u20b9 50 … <\/p>\n

Detailed SolutionWhat was the purpose of Inter-Creditor Agreement signed by Indian bank<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1119,1120,1190],"class_list":["post-91692","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1119","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"\nWhat was the purpose of Inter-Creditor Agreement signed by Indian bank<\/title>\n<meta name=\"description\" content=\"The Inter-Creditor Agreement (ICA) was signed by major Indian banks and financial institutions as part of the 'Sashakt' scheme for resolving stressed assets, particularly large value Non-Performing Assets (NPAs) under consortium lending (where multiple banks have lent to the same borrower). The ICA aims to facilitate faster decision-making among lenders regarding resolution strategies (like restructuring, liquidation, change in ownership, etc.) for stressed accounts involving multiple creditors, especially those with total exposure of \u20b9 50 crore or more. This helps avoid delays in resolving bad loans which arise when multiple banks with different stakes and priorities are involved. The Inter-Creditor Agreement is a mechanism among lenders to speed up the resolution of stressed assets under consortium lending.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/what-was-the-purpose-of-inter-creditor-agreement-signed-by-indian-bank\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What was the purpose of Inter-Creditor Agreement signed by Indian bank\" \/>\n<meta property=\"og:description\" content=\"The Inter-Creditor Agreement (ICA) was signed by major Indian banks and financial institutions as part of the 'Sashakt' scheme for resolving stressed assets, particularly large value Non-Performing Assets (NPAs) under consortium lending (where multiple banks have lent to the same borrower). The ICA aims to facilitate faster decision-making among lenders regarding resolution strategies (like restructuring, liquidation, change in ownership, etc.) for stressed accounts involving multiple creditors, especially those with total exposure of \u20b9 50 crore or more. This helps avoid delays in resolving bad loans which arise when multiple banks with different stakes and priorities are involved. 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