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Sbi - Ots

SBI is proposing an One Time Settlement (OTS) scheme for non-performing agricultural loans and other unsecured loans up to Rs. 20 lakh. Under the scheme, a farmer with a Rs. 20 lakh loan can settle 50% of their dues and have the remaining waived, allowing them to re-apply for a new loan within 30 days. Through this "Rinn Samadhan Programme", SBI expects to collect Rs. 1,500 crore in repayments by October 2017. The MD of SBI said the scheme keeps farmers within the formal credit system by getting some repayment and making them eligible for future loans, unlike full loan waivers which can promote non-repayment.

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3K views1 page

Sbi - Ots

SBI is proposing an One Time Settlement (OTS) scheme for non-performing agricultural loans and other unsecured loans up to Rs. 20 lakh. Under the scheme, a farmer with a Rs. 20 lakh loan can settle 50% of their dues and have the remaining waived, allowing them to re-apply for a new loan within 30 days. Through this "Rinn Samadhan Programme", SBI expects to collect Rs. 1,500 crore in repayments by October 2017. The MD of SBI said the scheme keeps farmers within the formal credit system by getting some repayment and making them eligible for future loans, unlike full loan waivers which can promote non-repayment.

Uploaded by

anshul
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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What is the situation with loans and NPAs?

As per RBI statistics, Indian banks' loan outstanding to the agricultural


sector has increased by 6.8% over the previous year. Presently, it is
worth Rs. 974,300 lakh crore.

Considering SBI, in June 2017, its loan outstanding to the agricultural


sector was Rs. 189,100 crore, i.e., 11.76% of the bank's total advances.

Of its non-performing assets, 9.5% were from agriculture, i.e. Rs.


17,988 crore.

Proposed scheme

What scheme is the SBI proposing?

SBI is proposing an OTS for non-performing agricultural loans and other


unsecured loans of up to Rs. 20 lakh.

A farmer with a Rs. 20 lakh loan can settle 50% of his dues, and the
remaining will be waived. He can again apply for a loan in 30 days.

Through this "Rinn Samadhan Programme," SBI expects to gather Rs.


1,500 crore by October 2017.

Why is this move significant?

Talking about this move, Rajnish Kumar, SBI MD said the OTS
scheme is interesting for farmers as it enables them to become "eligible
for a fresh loan."

By getting back "at least part of the loan", SBI will ensure farmers
remain within "formal credit channels."

In contrast to "loan waivers," which promote a habit of loan non-


repayment, the OTS urges farmers to repay loans.

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