In a meeting of bankers earlier this year, hectic parleys took place on restructuring loans to a power-sector project. The discussions centered around bringing in a new investor who was ready to pump more money into the project. A majority of the bank consortium had agreed to give the investor a go-ahead. However, officials from two banks refused to budge.
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June provide for a template for loan restructuring, making signing of inter-creditor agreements (ICA) between banks compulsory. Once banks sign an ICA, they are bound to agree to the collective decision for restructuring. Large banks hope the new guidelines will ensure that the house is put back in order. Till then, bankers won’t risk sticking their neck out.