Project Sashakt is a 5-point plan to resolve the issue of mounting non-performing assets. Under the project, financial institutions will enter into an inter-creditor agreement to authorise the lead bank to implement a resolution plan in 180 days. The agreement is the basis for the bank- led resolution approach for loans between Rs50-500 crore. This inter-creditor agreement will be a legal document and enforceable in any court of law. The agreement will make sure there is effective, good communication amongst banks. The proposal includes setting up of an asset management company. The banks will also set up alternative investment funds (AIFs) to raise money and back the asset management company. The report had recommended a five-pronged approach for loans up to Rs 50 crore, loans of Rs 50-500 crore and loans above Rs 500 crore.
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