The document also states that lenders whose credit facilities are not denominated in Rube, but who wish to become parties to the agreement, need appropriate authorizations and authorizations from the relevant government authority, including the RBI. Or the lender could enter into any other agreement, including the refinancing of its loans with loans denominated in Indian rupees, on the basis of what is necessary for the effective implementation of a resolution plan. The new agreement replaces the ICA for the settlement of the most stressed assets of July 23, 2018 and “could be accepted by lenders on a case-by-case basis,” says a letter from the IBA attached to the revised ICA project. “… After these lenders join this agreement, they are bound by the terms and conditions of this agreement as “lenders” and acquire the same rights and obligations that they would have acquired and assumed had that lender, as a lender, been an initial party to this agreement,” the ICA document states. The revised RBI standards require lenders, including financial institutions and small financial banks, to enter into an agreement between funds (ICA) within 30 days of a default, known as an “audit period” in which lenders control an account and decide on a resolution strategy. The Indian Banks` Association has adapted the Inter-Creditor Agreement (ICA) described by the Sashakt Committee to bring it into line with the Reserve Bank of India`s (RBI) revised guidelines on the dissolution of stressed assets announced on June 7. The Indian Banks` Association (IBA) on Tuesday published a revised draft Inter-Creditor Agreement (ICA), in line with the Reserve Bank of India`s revised circular on the “prudential framework for the resolution of stressed assets,” so that bankers can start liquidating stressed specific accounts. On 12.2.2018, the Reserve Bank of India (RBI) issued a revised Framework. The RBI reported that, in its decision of 2.4.2019, the Supreme Court referred to the above circular as non-is, which necessitated the issuance of a revised circular for the prompt and effective resolution of stressed assets. The RBI also reported that, in this context, on 7.6.2019, the RBI published a “Prudential Framework for Resolution of Stressed Assets” for the rapid settlement of the most stressed assets in a transparent and temporal manner, giving lenders full latitude in the design and implementation of resolution plans, while providing additional provisions to delay the implementation of the resolution plan or the opening of an insolvency procedure and by making agreement between creditors.
In accordance with contributions received by the Association of Indian Banks (IBA), the Prudential Framework published by the RBI made it mandatory, in the circular of 7.6.2019, to sign an inter-creditor agreement prior to the drafting of the motion for a resolution for a fixed account and, in this context, the IBA drew up an agreement between the creditors and disseminated it to its member banks in order to facilitate the resolution process.