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SBI to Offer One-Time Settlement for Tractor Loans

Managing Director at SBI, Rajnish Kumar said that, One-time settlement (OTS) schemes for tractor loans worth Rs 6,000 crore announced by State Bank of India (SBI). Speaking to a television channel.

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, said Kumar. He also said, “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.”

He informed that, adding that SBI is ready to take a haircut of 40 per cent of the outstanding balance as on September 30, 2016. On February 2, 2017, A circular to this effect was issued to the bank’s branches. The window for receiving applications under this scheme will be open till March 31.

Earlier, in December, State Bank of India had also notified OTS schemes for SME and education loans. The cut-off date for receiving applications under these schemes is March 20. The determination of eligibility for OTS schemes was driven by adherence to specific parameters, said Kumar.

“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. 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,” said Mr. Kumar.