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'Mahabank' signs Inter Creditor Agreement
Press Release
Thursday, July 26 | 02:08 PM
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Pune : The Reserve Bank of India (RBI), vide its circular dated February 12, 2018 has issued a revised framework for resolution of stressed assets (RBI Circular). The RBI Circular inter alia requires each bank to have board approved policies for dealing with stressed assets accounts.

Bank of Maharashtra has on 23rd July 2018, signed Inter Creditor Agreement with other Banks pursuant to the recommendation of Sunil Mehta Committee and under the aegis of Indian Banks’ Association (IBA), an Inter-creditor Agreement (ICA) has been prepared which shall serve as a platform for the banks and financial institutions to come together and take joint and concerted actions towards resolution of stressed accounts.

The ICA will be applicable to all corporate borrowers that have availed loans and financial assistance for an amount of Rs. 50 crore or more under consortium lending / multiple banking arrangements. The lead lender (i.e. the lender with the highest exposure) shall be authorized to formulate the resolution plan, which shall be presented to the lenders for their approval. The decision making shall be by way of approval of ‘majority lenders’ (i.e. the lenders with 66% share in the aggregate exposure). Once a resolution plan is approved by the majority lenders, it shall be binding on all the lenders that are a party to the ICA; and Each resolution plan that is formulated in terms of the ICA shall be in compliance with the RBI circular and all other applicable laws and guidelines.

“Bringing down stressed assets is the key focus for us, as well as, the banking industry. We believe that being part of a consortium / multiple banking arrangement, the ICA will help all the lenders for a fast-track NPA resolution process,” said Shri A. C. Rout, Executive Director, Bank of Maharashtra.
 
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