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New stressed asset norms will aid resolution prospects, say bankers

RBI has relaxed the threshold condition for upgrading an account under a resolution plan

Insolvency and Bankruptcy Code: Firms cope with changing landscape
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Abhijit Lele Mumbai
The revised framework for the resolution of stressed assets will help lenders to prepare workable plans for companies and enhance prospects of recovery, bankers said.

Rajkiran Rai G, managing director and chief executive, Union Bank of India, said the incorporation of the Inter-Creditor Agreement (ICA) in rules would help align many lenders in resolution activity. 

The revised framework has rules for seeking approval from lenders (75 per cent by value and 60 per cent by number) for resolution plans. This is a realistic provision, he added. The February 12 circular sought 100 per cent agreement among lenders on a resolution

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