The overseeing committee (OC) that is being set up under the inter-creditor agreement (ICA) for resolution of stressed assets will have six members, including Janki Ballabh (former Chairman, State Bank of India), MBN Rao (former Chairman & Managing Director, Canara Bank ), M Damodaran (former Chairman, SEBI) and HR Khan (former Deputy Governor, RBI).

The OC, which is being formed under the aegis of the Indian Banks’ Association (IBA), will approve resolution plans for stressed assets submitted by lead lenders.

The lead lenders will submit the resolution plan, along with the recommendations of the OC, to all lenders who have provided facilities to a borrower.

The OC also includes a senior Tata Group executive with expertise in the power sector and a Bombay High Court Judge, said a senior public sector bank official. The banker indicated that the OC could be split into two panels for faster processing of resolution plans.

The Sunil Mehta (Non-Executive Chairman of Punjab National Bank) Committee on restructuring stressed assets and creating more value for public sector banks had suggested the OC mechanism for all corporate borrowers that have taken loans and financial assistance for an amount of ₹50 crore or more under consortium lending/multiple banking arrangements.

The OC is being put in place to address concerns among top bankers that their decisions regarding resolution plans could be questioned by the so-called 4Cs – Courts, CVC (Central Vigilance Commission), CBI (Central Bureau of Investigation) and CAG (Comptroller and Auditor General).

For loans between ₹50 crore and ₹500 crore, the Mehta committee had recommended a bank-led (ICA) resolution approach, with the resolution being achieved in 180 days. The resolution plan has to be approved by lenders holding at least 66 per cent of the debt.

A resolution plan is a debt restructuring/resolution scheme put together by lenders in respect of the facilities availed by a borrower.

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