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Official Creditors Committee

28th June, 2024 International News

Official Creditors Committee


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Context: Sri Lanka reached a final restructuring agreement for 5.8 billion US dollars with its bilateral lenders’ official creditor committee in Paris.


  • Since the Official Creditor Committee (OCC) and Sri Lanka agreed on the main parameters of a debt treatment consistent with those of the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF on November 23, 2023, the OCC and Sri Lanka furthered discussions in order to finalize the agreement in a Memorandum of Understanding (MoU).
  • The OCC also continued to engage extensively with the Sri Lankan authorities, the IMF and the World Bank, as well as China and Sri Lanka’s private creditors in order to ensure comparability of treatment.
  • On June 26, 2024, the OCC and Sri Lanka finalized the MoU, based on the main parameters of the debt treatment agreed in November 2023.
  • The progress on the MoU had enabled the IMF staff to present to the IMF Executive Board the second review of Sri Lanka’s EFF arrangement and thus open the way for approval of the third disbursement under the arrangement.
  • The OCC commends the Sri Lankan authorities for their continuous efforts in implementing the reforms necessary for their country’s return to a sustainable path.
  • These engagements will ensure that the overall debt treatment granted to Sri Lanka is consistent with the IMF program parameters.

Official Creditor Committee (OCC) in Paris

  • OCC is a group formed to represent the collective interests of creditors during the debt restructuring or bankruptcy process of a debtor, typically a corporation or sovereign entity. 
  • The OCC is often appointed in formal insolvency proceedings, such as those under the jurisdiction of bankruptcy courts, to ensure that the creditors' interests are protected and that the restructuring plan is fair and equitable.
  • This term OCC is used more generally to describe any ad-hoc committee formed to represent official creditors during debt restructuring negotiations. 
  • It does not refer to a single, permanent organization but rather to various committees that might be formed for specific cases.
  • It was formed in May 2023 with the aim of simplifying Sri Lanka’s debt negotiations after the country defaulted on its external debt, in the wake of an unprecedented financial crash in 2022.
  • The OCC is a platform comprising 17 countries including India and members of the Paris Club such as Japan, that have extended loans to Sri Lanka.
  • The OCC's primary role is to negotiate and coordinate the restructuring of Sri Lanka’s external debt, ensuring a fair and sustainable resolution for the country's debt crisis.

Paris Club

  • The Paris Club is a group of mostly western creditor countries that grew from a 1956 meeting in which Argentina agreed to meet its public creditors in Paris. 
  • Their objective is to find sustainable debt-relief solutions for countries that are unable to repay their bilateral loans.
  • It describes itself as a forum where official creditors meet to solve payment difficulties faced by debtor countries.
  • All 22 are members of the group called Organisation for Economic Co-operation and Development (OECD).

Official Creditors Committee

Map showing Paris Club countries highlighted in green. (Via Wikimedia Commons)

The members are:

  • Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, Netherlands, Norway, Russian Federation, Spain, Sweden, Switzerland, United Kingdom, United States of America.

Paris Club been involved in debt agreements

  • Since its beginnings, the Paris Club has reached 478 agreements with 102 different debtor countries.
  • Since 1956, the debt treated in the framework of Paris Club agreements amounts to $ 614 billion.
  • It operates on the principles of consensus and solidarity. Any agreement reached with the debtor country will apply equally to all its Paris Club creditors.
  • A debtor country that signs an agreement with its Paris Club creditors, should not then accept from its non-Paris Club commercial and bilateral creditors such terms of treatment of its debt that are less favourable to the debtor than those agreed with the Paris Club.

The role of the Paris Club over time

  • The Paris group countries dominated bilateral lending in the last century, but their importance has receded over the last two decades or so with the emergence of China as the world’s biggest bilateral lender.
  • In Sri Lanka’s case, for instance, China, Japan and India are the largest bilateral creditors.
  • Sri Lanka’s debt to China is 52 per cent of its bilateral debt, 19.5 per cent to Japan, and 12 per cent to India. With Japan a member of the Paris Club, Sri Lanka needed assurances from China and India as well.


IndisnExpress, FinancialExpress,TheHindu


Q. What is Paris club and discuss its role in international debt to developing and under developed countries. 200 words