SBI scheme to coexist with RBIs
By Our Banking Bureau | 07 Feb 2002
There have been some relaxations in rules under RBIs OTS II scheme. A non-performing account (NPA) with outstanding principal amount Rs 25,000 (without interest) as on 31 March 1998 will be eligible for the settlement. Earlier, the cut-off level was up to Rs 5 crore (including interest). Under SBIs OTS, an NPA up to Rs 1 crore (including interest) will be eligible for settlement.
Under RBIs OTS II, the settlement facility will be available to borrowers against whom the legal proceedings are on, subject to the consent of the courts and lok adalats concerned. However, in such cases, the right to pursue the litigation to recover the entire dues from the borrowers and guarantors will still persist.
Further, the banks right to recover through legal means all dues inclusive of interest from such borrowers as will accept the OTS but fail to pay the settled amount will not stand withdrawn, the sources add.