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  1. Bank of Maharashtra signs ICA pact with banks to deal with stressed assets

Bank of Maharashtra signs ICA pact with banks to deal with stressed assets

Bank of Maharashtra (BoM) has signed an Inter Creditor Agreement with other banks on the recommendation of Sunil Mehta Committee and under the aegis of Indian Banks’ Association (IBA) to fast track NPA resolution.

By: | Pune | Published: July 25, 2018 1:49 AM
rbi, bank of maharashtra 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, a statement from BoM said.

Bank of Maharashtra (BoM) has signed an Inter Creditor Agreement with other banks on the recommendation of Sunil Mehta Committee and under the aegis of Indian Banks’ Association (IBA) to fast track NPA resolution.

The RBI has issued a revised framework for resolution of stressed assets which requires each bank to have board approved policies for dealing with stressed assets / accounts. BoM said 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.

“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,” AC Rout, ED, Bank of Maharashtra, said.

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, a statement from BoM said. The lead lender 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 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. 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.

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