Business Standard

Troubled debt: Cracks emerge in India Inc's loan recast plans over ICAs

Private banks may prefer to make extra 20% provisioning and walk out

Illustration: Binay Sinha

Illustration: Binay Sinha

Raghu Mohan Mumbai
The first major cracks have emerged over an early restructuring of troubled loans, with banks sharply divided over the mandatory signing of inter-creditor agreements (ICAs).

Private banks have come to an “informal consensus” that they would rather take an additional provisioning hit of 20 per cent than sign “ICAs which are detrimental to their interests”.

They are of the view that state-run banks (with bigger exposures) will call the shots in crafting ICAs. This can lead to a situation in which the void created due to the exit of private banks from the recast process (in specific accounts) may not

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Sep 21 2020 | 6:05 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers.

Register to