Nearly two dozen Banks and Financial Institutions, including SBI and LIC, have signed the inter-creditor agreement (ICA) framework to speed up the resolution of stressed assets which are under the 500-crore rupee bracket.

The framework is part of the Project Sashakt, the report on bad bank drafted and submitted by the committee headed by Non-executive Chairman of PNB, Sunil Mehta earlier this month.

Talking to reporters, Mr Mehta said, the objective of ICA is to resolve stressed assets fast, and will primarily focus on NPAs in the 50 crore to 500 crore bracket.

He said, the framework will deal separately with stressed assets of 500 to 2,000 crores or more. The agreement will also enable lenders to move expeditiously and protects their interest.

As of March this year, there were close to 3 trillion worth of bad loans in the 50 to 500 crore category and 2 trillion under 50 crore ticket size.

Finance Minister Piyush Goyal has described the move as a huge step forward in addressing the banking industry’s problems.

He said in a tweet that the resolution over dissolution approach will strengthen banks and businesses, protect jobs and help economy grow even faster.