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 ...
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