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Banks to finalise inter-creditor agreement to tackle NPAs

Non Performing Assets

Non Performing AssetsIn a bid to handle the menace of Non-Performing Assets (NPAs), bankers are planning to finalise the Inter-Creditor Agreement (ICA) framework that ensures effective communication among lenders.

According to the reports, the ICA mechanism is expected to be enforced this month itself.

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In the wake of the rising menace of NPAs in the banking sector that crossed Rs 9 lakh at the end of December 2017, the Reserve Bank of India (RBI) warned the banks regarding worsening of the situation.

The agreement is a part of Project Sashakt. It will be taken to boards of respective banks and expected to be cleared in a couple of days, said Sunil Mehta, non-executive chairman, Punjab National Bank.

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Union Finance Minister Piyush Goyal also attended the meeting organised by Indian Banks Association.

Inter-creditor agreement is a framework that enables association of lenders to take up NPA cases.

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