What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?
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Answer: D. The Inter-Creditor Agreement (July 2018), part of the 'Project Sashakt' plan, covers stressed loans of Rs 50 crore or more given by a group of lenders. The lead lender prepares a resolution plan, and once lenders holding 66% of the debt approve it, it binds all of them. This speeds up the resolution of bad loans.
Watch for: The Rs 50 crore figure appears in option C too, so students who only remember the number may choose it.
Why the other options are wrong
- A. Wrong because the agreement is about bank bad loans, not government deficits.
- B. Wrong because it is not a scheme to fund infrastructure projects.
- C. Wrong because it does not create any regulator for new loan applications.
Source to check: Ministry of Finance / Indian Banks' Association press release on Project Sashakt and Inter-Creditor Agreement (July 2018)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.