DR Ambedkar IAS Academy

Mint Primer: What is Project Sashakt and how it will work

Create your Web Presence with Namecheap

The centre last week accepted Project Sashakt, a five-pronged strategy to resolve bad loans, with the larger ones going to an asset management company (AMC) or an alternative investment fund (AIF). Mint takes a look at how it will work.

What is Project Sashakt?

Project Sashakt was proposed by a panel led by PNB chairman Sunil Mehta. Bad loans of up to  50 crore will be managed at the bank level, with a deadline of 90 days. For bad loans of  50-500 crore, banks will enter an inter-creditor agreement, authorizing the lead bank to implement a resolution plan in 180 days, or refer the asset to NCLT. For loans above  500 crore, the panel recom­mended an independent AMC, supported by institutional funding through the AIF. The idea is to help consolidate stressed assets.

Leave a Reply

Your email address will not be published. Required fields are marked *