2019 GS Paper I, all questions

UPSC Prelims 2019 · GS Paper I

Question 72: Economy and Social Development

What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

aTo lessen the Government of India’s perennial burden of fiscal deficit and current account deficit
bTo support the infrastructure projects of Central and State Governments
cTo act as independent regulator in case of applications for loans of ₹ 50 crore or more
dTo aim at faster resolution of stressed assets of ₹ 50 crore or more which are under consortium lending

AnswerUPSC’s answer is (d).

The Inter-Creditor Agreement, signed by Indian banks and financial institutions in 2018 under Project Sashakt, aims at faster resolution of stressed assets of Rs 50 crore or more that are under consortium lending. It lets lenders arrive at a common resolution plan by agreed majority, avoiding delays caused by disputes among them. It is not about fiscal or current account deficits, infrastructure projects, or acting as a loan regulator.

Why each option is right or wrong
  • (a) It does not address fiscal or current account deficits.
  • (b) It does not fund infrastructure projects.
  • (c) It does not make an independent regulator for loan applications.
  • (d) Correct: it speeds up resolution of large stressed assets under consortium lending.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2019, General Studies Paper I, Series A. The paper on upsc.gov.in.