State Bank of India (SBI) has announced one-time settlement (OTS) schemes for tractor loans worth Rs 6,000 crore, managing director Rajnish Kumar said on Tuesday. Speaking to a television channel, Kumar said accounts falling under the categories of doubtful or loss-making assets for loans disbursed before September 30, 2011 will be eligible for the OTS scheme. “We are saying that other agri loans, like KCC (Kisan Credit Card) and other term loans of the same tractor and farm loan accounts, may also be covered under the same concession,” Kumar said, adding that SBI is ready to take a haircut of 40 per cent of the outstanding balance as on September 30, 2016. A circular to this effect was issued on February 2, 2017 to the bank’s branches. The window for receiving applications under this scheme will be open till March 31.
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Earlier, State Bank of India had also notified OTS schemes for SME and education loans in December. The cut-off date for receiving applications under these schemes is March 20. Kumar said that the determination of eligibility for OTS schemes was driven by adherence to specific parameters.
“One-time settlement sometimes gives us a better recovery and the purpose of formulating the scheme is that the key element is that it is non-discretionary and is parameter-driven and follows a tick-boxes route,” Kumar said. “If all the boxes our branch manager (BM) would tick at his level, then he can approve. So, the delegation of power is right up to the BM level.”