Interim Finance Minister Piyush Goyal is expected to interact and meet with heads of various PSU banks to deliberate on a part of the 'Project Sashakt' framework.
The Sashakt project has been approved by a committee of bankers headed by Sunil Mehta, the non-executive Chairman of Punjab National Bank
This discussion, organised by the Indian Banks Association, is expected to deliberate upon the inter-creditor agreement as outlined in the five pronged approach taken up by Project Sashakt.
Two days ago, details about Project Sashakt had been reported in the public via news sources. The project, is expected to tackle case of rising bad loans in the country. The Sashakt model outlines majorly five approaches- SME resolution, bank-led, an AMC (Asset Management Companies) / AIF led resolution approach, NCLT (National Company law tribunal) and IBC (Insolvency and Bankruptcy Courts) approach, and an asset-trading platform.
The discussion tomorrow is expected to veer around formalizing the inter-lender structure.
This structure is expected to authorize lead bank in a typically large loan structure to implement resolution plans within RBI's time-frame of 180 days. The lead bank could prepare a resolution plan such as paneling turnaround specialists and other industry experts for a turnaround of assets.
The IBA would be paneling eminent personalities in the independent screening committee to validate due processes within 30 days and resolution would proceed if lenders holding 66% of debts share their approvals in line with a NCLT process.
Once the resolution plan is approved, the lead bank would be responsible to execute the plan.
The interim Finance Minister had been reported of saying that the project outlined banks to set up an independent asset management companies (AMCs) and additional steering committees for faster resolution of bad loans.
The panel headed by Sunil Mehta, recommended the formation of an asset management company and an alternative investment fund (AIF) as resolution approaches to deal with NPA cases of more than Rs 500 crore.
Currently, there are close to 200 accounts, each of which owes more than Rs 500 crore to banks. The total exposure runs into Rs 3 .1 lakh crore.