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1) To provide avenues to the MSE borrowers to opt for One Time Settlement
to the advantage of the bank as well as its MSE clients
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3] ELIGIBLE BORROWERS:
Borrowers who are coming under the Micro and Small Enterprises Sector as
defined in the Micro, Small and Medium Enterprises Development Act, 2006 and whose
accounts have become Non-performing assets are eligible to avail the benefits under
this OTS scheme.
The following definitions of Micro and Small Enterprises sector as outlined in the
Micro, Small and Medium Enterprises Development Act, 2006 shall form the basis for
categorizing the eligible borrowers.
These shall include Small Road & Water Transport Operators, Small Business,
Retail Trade, Professional and Self Employed Persons and all other service enterprises.
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5) INELIGIBLE CASES:
6) COVERAGE:
6.1 All NPAs in the MSE sector with an outstanding balance of Rs.5.00 Crore and below
shall be eligible under this Scheme.
6.2 Cases pending before Courts/DRTs/BIFR shall be eligible, subject to the consent
decree/order being obtained from the Courts/DRTs/BIFR.
6.3 Cases where Bank has issued notice or taken action Under Section 13(4) of the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act (SARFAESI-2002) shall be eligible under this scheme..
6.4 Eligible written off accounts shall be covered under this scheme.
7) SETTLEMENT FORMULA:
Depending upon the age of such NPAs, discount may be offered on the balance
outstanding as on the date of account becoming NPA amount as under :
2) Age of doubtful or loss NPAs is more than 3 years but upto 5 years – Maximum of
30%
3) Age of doubtful or loss NPAs is more than 1 year but upto 3 years -Maximum of
20%
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8) PAYMENT SCHEDULE
1) The settled amount must be paid within a maximum period of 6 months from the
date of arriving at OTS.
2) Applications shall be processed only after the deposit of 5% of the eligible amount to
ensure the borrower’s willingness.
3) The borrower has to pay atleast 20% of the settlement amount (inclusive of 5% paid
at the time of submitting the application) at the Front End.
4) No interest shall be charged if the entire amount of settlement is paid within the
stipulated period.
9) GENERAL CONDITIONS :
9.1 The value of security should be as per the valuation report given by the Approved
Valuer, which should not be more than one year prior to the date of OTS proposal.
9.3 Default clause to be included in the proposal. That is even if a single installment
of compromise amount is not paid, the OTS/settlement shall stand cancelled and the
bank is entitled to receive the entire amount due to the Bank as per the Books/Suit
claim in case suit has already been filed in respect of the accounts.
9.5 In the letter, if any, to be addressed to the parties for communicating sanction of
OTS/Compromise, it shall be ensured that;
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Wherever the borrower settles the dues with the bank as per the OTS by availing
concession, in such cases, the Bank at the request of the borrower may issue a ‘No
Due Certificate’ with a clause indicating that the borrower has settled the dues
under OTS.
*
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