IBA expert panel to vet loan recast proposals

Banks will jointly set up an expert committee to vet loan restructuring proposals involving amounts of 500 crore and above to shield officials from any subsequent scrutiny by investigative agencies, said people with knowledge of the matter.

The committee, which will be set up by the Indian Banks’ Association, will comprise financial services experts and persons of eminence from the industry, they said. It will conduct process validation of the restructuring without interfering in the commercial judgment of the lenders.

For loans below 500 crore, individual banks can set up similar committees of their own, said a senior banker who did not want to be identified.

“The idea is to enhance the comfort and confidence of lenders in large value restructuring cases,” he said.