Faster Bad-Loan Resolution Pact Signed by Over 20 Indian Banks

Vastavam web: More than 20 Indian lenders on Monday signed a pact aimed at faster resolution of bad loans, officials said, while more could join by the end of the week in what is the latest bid to cut record levels of soured assets in Asia’s third-biggest economy. A government-appointed panel this month proposed the so-called inter-creditor agreement among other measures after criticism that at times smaller lenders in a lending consortium were creating roadblocks for speedier resolution. “The objective is to use this inter-creditor agreement for faster facilitation of the stressed assets resolution,” said Sunil Mehta, the non-executive chairman of second-biggest state-run lender Punjab National Bank, who also headed the panel.

“One of the major issues was consensus among lending banks on what should have been a common resolution plan. ”Top lender State Bank of India was among banks which signed the agreement.