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

What was the purpose of Inter-Creditor Agreement signed by Indian…

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

Answer

(a) Incorrect. The Inter-Creditor Agreement (ICA) was not meant to reduce fiscal deficit or current account deficit; those are macroeconomic issues unrelated to this banking framework.
(b) Incorrect. Its purpose was not to fund or support infrastructure projects of governments; it dealt with resolution of stressed loans.
(c) Incorrect. ICA is not an independent regulator for loan applications of Rs. 50 crore or more. It is an agreement among lenders for coordinated decision-making.
(d) Correct. Under the RBI’s stressed asset resolution framework, the ICA was signed to enable faster resolution of stressed assets, especially for accounts of Rs. 50 crore or more under multiple/consortium lending.