What was the purpose of the Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

Q. What was the purpose of the Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

1. To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit
2. To support the infrastructure projects of Central and State Governments
3. To act as an independent regulator in case of applications for loans of Rs 50 crore or more
4. To aim at faster resolution of stressed assets of Rs 50 crore or more which are under consortium lending.

Answer: To aim at faster resolution of stressed assets of Rs 50 crore or more which are under consortium lending.

Banks and Financial Institutions (FIs) have signed the Inter-Creditor Agreement (ICA) aimed at faster resolution of stressed assets of Rs. 50 crore or more which are under consortium lending. It has been signed by 22 public sector banks, 19 private sector banks and 32 foreign banks and 12 major financial intermediaries like LIC, HUDCO, etc.