पंजाब एं ड स ंध बैं क PUNJAB & SIND BANK

(भारत सरकार का उपक्रम) (A Government Of India Undertaking)

H.O. Law & Recovery Deptt,
प्र.का.सिसध एिं ि ूली सिभाग,
4TH Floor, Bank House,
चतुर्थ तल , बैं क हॉउस, 21, Rajendra Place,New Delhi-
21, राजेन्द्र प्लेस, नई दिल्ली- 110008 110008
दू रभाष : 011-25786502 Phone: 011-25786502
ई-मे ल: ho.lr@psb.co.in E-mail: ho.lr@psb.co.in
LAW CIRCULAR NO. : 274 DATED: 18.09.2019
CODE No. of the Department : H-9010
Number of pages of Circular : 83
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ALL BRANCHES/CONTROLLING OFFICES

REG:-RECOVERY MANAGEMENT POLICY AND GUIDELINES FOR SETTLEMENT /

WRITE-OFF IN BORROWAL ACCOUNTS

The Bank’s Recovery Management Policy, as circulated vide Law Cir No 266 dated
08.08.2019 has been amended by the Board. The amended policy, as approved by the
Board will supersede all the existing policies in this regard. The amended policy is given
hereunder,

PREFACE: It has been experienced in the past that conventional methods of recovery
such as recovery through legal recourse do not yield results in desired time. Therefore,
the process of recovery of Bank’s dues through settlement and compromise is
considered to be an effective hassle free tool which not only bypasses the long legal
recourse but results in immediate liquidity and income generation.

OBJECTIVES:

a) To reduce the NPA level in absolute terms by accelerating recoveries.

b) To effectively use the tool of compromise settlement.

RBI GUIDELINES:

Bank’s Recovery Management Policy has been formulated after keeping in mind the
guidelines issued by Reserve Bank of India from time to time.
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 In the guidelines issued by RBI vide circular No.BP.BC.81/21.01.040/95 dated

28.07.1995, stress was laid on the following points: -

i) A compromise should be a negotiated settlement which will ensure to recover

Bank’s dues to the maximum possible extent at the minimum possible expense
after analyzing the strengths and weaknesses of a particular case.

ii) While tackling NPAs, a proper distinction will have to be made in approach
between willful defaulters and defaulters due to circumstances beyond their
control.

iii) Where security is available, either by way of charge, lien or attachment/ restraint
by an order of a Court, the basic parameter for analysis would be their quality,
realisability, marketability and enforceability.

iv) While arriving at a negotiated settlement, the advantage available to the Bank
from prompt recycling of the funds should be weighed in comparison to the likely
recovery by following legal or other protracted course of action.

v) It is also to be ensured that, as far as possible, there should not be any

significant deviation from the laid down norms of policy and a settlement should
be in Bank’s best interest.

vi) Where staff accountability has not been looked into, the same should be
completed in a time bound manner.

RBI also advised that the Banks should have in place a ‘Loan Recovery Policy’, duly
approved by the Board, clearly setting out:

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a) The manner of recovery of dues.

b) The norms for allowing concessions.
c) A Committee approach for vetting and recommending settlement/ write-off
proposals to ensure a fair and proper assessment.
d) The decision levels.
e) Reporting/Review system.

 In subsequent communication No. RBI/2007-08/152/DBOD.No.BP.BC.34/

21.04.048/ 2007-08 dated 04.10.2007, RBI had advised that

a) Bank’s Boards are required to lay down policies and guidelines covering, among
other things, valuation procedure to be followed to ensure that the economic
value of financial assets is reasonably estimated based on the assessed cash
flows arising out of the repayments and recovery prospects.

b) Banks should work out the net present value of the estimated cash flows
associated with the realizable value of available securities net of the cost of
realization and the net present value of the settlement amount should not
generally be less than the NPV of the realizable value of securities.

 In terms of the Circular No. RBI/2009-10/500-DBOD.BP.BC.No

112/21.04.048/2009-2010 dated 21.06.2010, RBI had advised that the officer/
authority sanctioning a compromise/ OTS should append a certificate
stating that the compromise settlements are in conformity with RBI
guidelines. Since, RBI guidelines are duly incorporated in the Recovery
Management Policy of the Bank, all sanctioning authorities are to enclose a
certificate that compromise/ OTS proposal has been sanctioned within the
delegated powers and the proposal is in total conformity with the Bank’s
Recovery Management Policy.

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MEASURES FOR RECOVERY:

(A) REGULAR INTERACTION WITH BORROWER/ GURANATORS:

Bank views regular persuasion as the time-tested instrument for recovery.

Persuasion is effective both at the Performing as well as Non-Performing stage of a
loan.Persuasion by the Bank, inter-alia, includes effective follow up with the
borrowers/guarantors by way of reminders/ telephonic calls/ personal meetings.

(B) RESCHEDULING/ RESTRUCTURING/ REHABILITATION:

Rescheduling/Restructuring and follow up through the forum of consortium

meetings; using the group approach by convening meetings of Banks/ Financial
Institutions who are Bankers/Lenders to other group companies. In respect of Non
Performing Advances besides pursuance for recovery/upgradation, efforts should be
made for rescheduling/ restructuring of loans/limits and rehabilitation of industrial
units, as per policy, accounts of which have become Non-Performing due to external
factors (which no more exist or can be managed) or on account of manageable
internal deficiencies.

(C) ACTION UNDER SECURITISATION AND RECONSTRUCTION OF FINANCIAL

ASSETS AND ENFORCEMENT OF SECURITIES INTEREST (SARFAESI) ACT,
2002:

In case the measures noted above do not yield the desired results, the Banks have
the facility of using the SARFAESI Act, 2002 which is a handy tool for dealing with
the defaulting borrowers/ guarantors. The Act facilitates enforcement of security
interest by secured creditors without the intervention of courts. In view of judgment
of Hon’ble Supreme Court of India in the case of M/s Transcore India Ltd. Vs Union
of India & Others, Bank can proceed simultaneously under DRT Act as well as
SARFAESI Act. Similarly, there is a provision for transfer/assignment of NPAs to

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ARCs, other investors which will realize the impaired assets within a time frame.
The Act also provides a legal framework for securitization of assets. The Govt. of
India has also notified the Security Interest (Enforcement) Rules, 2002, which
prescribes the manner for exercise of rights of secured creditors under the Act.

Field functionaries should make effective use of the rights of enforcement of

security interest, as provided in the Act, for quick resolution of NPAs, as per
detailed guidelines issued on the subject. Wherever required, action under the
SARFAESI Act should be initiated promptly after a financial asset becomes NPA,
as per the classification norms. If, after initiation of action under SARFAESI Act,
borrower/ guarantor comes forward to regularize/adjust the account, TAMSUK deed
should be got signed from the party. After exhausting all other avenues for
recovery, suit should be filed for recovery of dues at the earliest within the limitation
period in Civil Courts. If the total dues in the account are Rs.20.00 Lakhs or more,
the case be filed in respective DRT. However, before such a decision is taken,
especially in relatively large cases, efforts should be made to arrange a meeting
with the ZM/ GM (L&R)/ ED/ MD & CEO, to explore the possibility of arriving at
some amicable settlement. The basic focus will be on realisability of securities,
assets of partners/guarantors and an early recovery of settlement amount. In
respect of Govt. sponsored loans, effective use of State Recovery Acts must be
made by filing RC with Tehsildar/other appropriate forum. Wherever applicable,
claim with ECGC/CGTMSE must be filed in time.

(D) FILING RECOVERY SUIT/ EXECUTION OF DECREE

If all the measures noted above fail to bring the defaulter borrowers / guarantors to
the negotiating table, the last resort would be to approach the Court/DRT. If the suit
is filed, efforts should be made for i) Getting the Receivers appointed on the assets
already charged to the bank and ii) Obtaining orders for the attachment/ restraint
before judgment in respect of the personal assets of the borrowers and guarantors
so as to ensure that assets available are not eroded. Needless to emphasize that

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bank is always open to dialogue for early settlement of cases. In decreed accounts,
execution must be filed expeditiously so as to realize the available securities.

In suit filed cases, where settlement has been approved by the Bank and the
repayment is to come in installments, the borrowers/ guarantors would be required
to enter into consent decree with default clause.

It is to be ensured that, besides effecting recovery in Non-Performing accounts,

timely recovery be effected on a regular basis in performing advances as well, so
that these do not slip to category of Non-Performing assets. Continuous close
monitoring is to be done by the branches, Zone and the respective Depts. at the
Head Office to ensure a proper control over slippage of performing advances to
non-performing category. In this regard special efforts for upgradation of Special
Mention Accounts (SMAs) are to be made and wherever considered viable, the
mechanism of restructuring/rescheduling the loans should be used.

The other steps for effecting recovery include taking steps to restrain the defaulting
borrowers/ guarantors from floating new public issues; advertising in the
newspapers about bank’s charge on the immovable properties; warning the general
public about dealing with such properties and initiating action under SARFAESI Act
etc.

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CHAPTER-I
REG: POLICY FOR SETTLEMENT OF NPA (DOUBTFUL / LOSS) & TWO
ACCOUNTS WITH PRESENT BOOK OUTSTANDING UPTO RS. 25.00 LAKHS

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1. INTRODUCTION:

Keeping in view the requirement of Bank, demands of the field functionaries and
based on the economic situation of the country, a policy for settlement of NPA
(Doubtful / Loss) & TWO accounts with present book outstanding upto Rs. 25.00
Lakhs (As on date) is introduced.

2. VALIDITY:

All eligible NPA (Doubtful / Loss) & TWO accounts with present book
outstanding upto Rs.25.00 Lakhs (as on date) will be exclusively dealt in the
present chapter (Chapter-I) and will not be considered under Chapter-II of this
policy.

3. COVERAGE:

For the purpose of this policy, the account should fulfill the under noted criteria:

a) All NPA/ TWO cases whether Non-suit filed, suit filed or decreed cases are
eligible. In case of T.W.O. accounts, Book o/s should be calculated as if no
T.W.O. has been done.

b) The account should be categorized as Doubtful/ Loss asset at the end of

previous quarter.

c) All the accounts whether secured / partially secured / unsecured are eligible for
settlement under the policy.

d) The Present Book O/s does not exceed Rs.25.00 Lakhs.

e) Cases where Bank has proceeded under SARFAESI Act, 2002 will also be
eligible.

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f) Accounts under Consortium or Multiple Banking arrangements will also be

eligible to be covered under the policy.

g) Eligible accounts referred for Revenue Recovery action under State Recovery
Laws will be eligible, subject to requisite charges, if any payable, to be recovered
separately and remitted to the State Authorities.

h) NCLT Cases where bank has a minimum 90% voting share and also bank has
initiated Corporate Insolvency Resolution Process (CIRP) may also be covered
provided the borrower comes forward with a settlement offer as per settlement
policy.

i) Cases where settlement was earlier approved but not implemented and has
already been declared failed.

j) Units where rehabilitation / restructuring have failed are eligible.

k) Settlement in a single account, out of a number of group accounts, can be

considered subject to the condition that the security charged in the account
should not be released till all the accounts are settled.

Following cases will NOT be eligible for consideration under the policy:

a) The account in which Bank has declared fraud or the party has been declared as
willful defaulter and his name has been/is being reported to RBI.

b) Central Govt. / State Govt. guaranteed accounts will not be considered under this
policy.

c) Units under rehabilitation / restructuring will not be eligible. However, units where
rehabilitation / restructuring have failed are eligible.

d) Units under liquidation will not be eligible.

e) Accounts in the name of staff member* and/or his/her spouse.

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f) Accounts guaranteed by a staff member or where an undertaking from the staff

member for payment of loan, is on record.

g) Cases in which the borrower/ guarantor and Bank has already filed consent
terms (Consent Decree) with default clause in a court/DRT/ Lok Adalat and party
has honoured the consent terms.

h) “Compromise cases” where repayment has already commenced as per the

agreed terms, are not eligible. However, cases of failed compromise settlement
where the amount is not received within the stipulated time can be considered
afresh.

i) Accounts already adjusted shall not be reopened and amount already recovered
shall not be refunded in any case.

j) Loans against liquid securities such as Fixed Deposits, Govt. Securities like
NSC/KVP/IVP, Surrender Value of LIC Policies, Shares etc.

k) Loans against Jewellery / Gold Ornaments.

NOTE:

*For the purpose of settlement of an account, staff members shall mean the serving
staff members and ex-staff members, whose terminal dues are withheld / have not
been paid but shall NOT include ex-staff members receiving pension.

Unsecured balances outstanding in Loans against Fixed Deposits, Govt. Securities

like NSC/KVP/IVP, Surrender Value of LIC policies, Shares, Loans against jewellery
/ gold ornaments etc. after adjusting the value of securities on surrender/sale can
however be considered for settlement under the policy.

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4. AMOUNT TO BE RECOVERED TOWARDS SETTLEMENT UNDER THE POLICY:

The minimum amount that should be recovered under the policy for Doubtful/ Loss
assets having Present Book O/s upto Rs.25.00 Lakhs will be calculated as on the
date of settlement as per the calculation given as under,

Sr. Security Coverage: Settlement Amount

No. Fair Market value of the Present Book O/s: Present Book O/s:
securities (primary + Upto Rs. 10.00 Lakhs Above Rs. 10.00 Lakhs
collateral) as per latest Upto Rs. 25.00 Lakhs
valuation report, not older
than one year
i. Upto 10% of Present Book Min 25% of Present Min 30% of Present
outstanding* Book outstanding Book outstanding
ii. Above 10% upto 30% of Min 30% of Present Min 35% of Present
Present Book outstanding Book outstanding Book outstanding
iii. Above 30% upto 50% of Min 45% of Present Min 45% of Present
Present Book outstanding Book outstanding Book outstanding
iv. Above 50% upto 75% of Min 60% of Present Min 60% of Present
Present Book outstanding Book outstanding Book outstanding
v. Above 75% upto 100% of Min 75% of Present Min 75% of Present
Present Book outstanding Book outstanding Book outstanding
vi. Above 100% of Present Book Minimum Present Book outstanding
outstanding

*Present Book Outstanding= Outstanding at the time of NPA - Recovery effected in

the account after NPA (Excluding interest reversed)

Note:

i. Cases where variation in valuation of security is more than 15 % (compared to

valuation of security reported at the time of sanction), reasons for the same along
with justification shall be commented in the proposal invariably.
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ii. Legal expenses, Insurance Charges and all other debited / recorded expenses
incurred by the bank are to be recovered in full.

iii. The DICGC / CGTMSE/ ECGC claim, if any, credited at the time of NPA is not to
be taken into account to arrive at the settlement amount. Retained amount of
DICGC / CGTMSE/ ECGC claim (balance amount of claim after proportionate
refund of claim) would be over and above the amount of settlement.

5. CALCULATION OF SETTLEMENT AMOUNT:

To be specific, the settlement amount is to be calculated as under:

S. ITEM AMOUNT
No.
i. Principal Amount O/S as on date of settlement

ii. ADD Amount of DICGC/CGTMSE/ECGC claim, if any,

which was credited to the account on/after date of
NPA
iii. Present Book O/S (i + ii)

iv. Applicable % as per Para No. 4 of Present Book o/s

as arrived at Point No. iii above
v. ADD Litigation expenses and all other expenses incurred
(whether paid or payable) which have not been
accounted for in the book outstanding.
vi. Settlement Amount ( iv + v )*

*This amount will be considered as base for negotiation with borrower/

guarantor for settlement, however, branch/ zone will try to recover as much
as possible.

Sharing of the recovery with DICGC/ CGTMSE/ ECGC would be done as per the
extant guidelines on the subject.
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6. VALUATION OF SECURITIES:

The basis of valuation of securities shall be as under:

i. Fair Market Value of the Securities as per last valuation report (Not older than 1
year) is to be considered.

ii. The Branch incumbent shall visit the site and verify whether the valuation of the
security submitted by the Bank empanelled valuer is fair and reasonable as per
discreet and independent enquiries made during his visit.

iii. In case of Plant & Machinery, Realizable Value as per last valuation report
(Valuation Report should not be older than 1 year) shall be considered while
computing security coverage.

iv. Valuation of stocks shall be considered on the basis of last stock statement
submitted by the borrower OR as per Branch Manager’s assessment during the
last visit which should not be more than one month old and valuations be
compared with the last stock statements, wherever available, submitted by the
borrower.

7. AUTHORITY FOR APPROVING SETTLEMENTS:

Under the present policy, Branch In-charge/ Zonal Manager shall be the sanctioning
authority irrespective of their grade/scale/ designation and irrespective of the
quantum of concessions involved as under:-

Present Book O/S as on date of Authority to approve settlement

Settlement
Upto Rs.5.00 Lakhs Branch Incharge upto Scale II
Upto Rs.15.00 Lakhs Branch Incharge Scale III & above

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Present Book O/S as on date of Authority to approve settlement

Settlement
Upto Rs.25.00 Lakhs Zonal Manager/ Asstt. General Manager,
Asset Recovery Branch-I, New Delhi

However, all such cases sanctioned under the powers of BM shall be reviewed by
the respective Zonal Managers and cases sanctioned under the powers of Zonal
Manager/ Asstt. General Manager, Asset Recovery Branch-I, New Delhi shall be
reviewed by Head Office, Law & Recovery Deptt. on quarterly basis.

It is clarified that no official can exercise the above delegated powers in cases
of proposals in accounts in which credit facilities had been sanctioned by
him/ her. Such cases may, however, be sanctioned by next higher authority.

8. REPAYMENT PERIOD:

i. Upfront amount of 5% be deposited at the time of submission of settlement

application by the borrower / guarantor. The amount will be kept in “No Lien”
account and the same will be refunded if the proposal is not accepted. The
amount will be appropriated on acceptance of sanction alongwith terms and
conditions by the borrower/ guarantor.

ii. 10% of settlement amount over & above the 5% deposited at the time of
submission of settlement proposal is to be deposited by the borrower/ guarantor
within 30 days from the date of intimation of sanction.

iii. The balance settlement amount should preferably be recovered immediately on

sanction, within a maximum of 90 days of intimation during which no interest will
be charged.

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iv. If borrower/ guarantor fails to pay settlement amount within 90 days of intimation
and approach the Bank for extension of time, then extension of time upto 6
months may be considered by the sanctioning authority and extension of time
upto 12 months may be considered by the next higher authority ( In case of Asset
Recovery Branch-I, Asstt. General Manager, Head Office, Law & Recovery
Deptt.) such a manner that the total repayment period should not exceed 12
months. No extension is allowed beyond 12 months.

v. Where the settlement amount is proposed to be paid in a period exceeding 90

days, the settlement amount will carry simple interest @ one year MCLR
(prevailing at the time of settlement) on reducing balance w.e.f the date of
intimation of sanction to the borrower/ guarantor till the account is adjusted in full
and final.

vi. Bank should obtain post-dated cheques of settlement amount, except in cases
where the borrower/ guarantor has proposed to repay the amount from sale
proceeds of some property or the amount is to be paid out of the sale proceeds
of the mortgaged/attached security (ies).

9. SETTLEMENT OF INDIVIDUAL ACCOUNTS BELONGING TO A GROUP:

In case the party/ guarantors come forward for settlement of a single account, out of
a number of group accounts, the same can be considered, in isolation and joint
settlement of all accounts of the group may not be insisted upon subject to the
condition that security charged in the account (Whether primary / collateral) should
not be released till full & final adjustment of all the group accounts. However,
eligibility of the individual account, under the policy, must be ensured.

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10. EXAMINATION OF STAFF ACCOUNTABILITY:

It is essential that in all cases of settlement, endeavor should be made to first

finalize the staff accountability aspect and necessary disciplinary action, wherever
warranted, against the erring staff members in a time bound manner by the
concerned Zonal Manager. In cases where a settlement proposal is being
considered by the Branch Manager and staff accountability has not been looked
into, a certificate as per “Annexure-D” shall suffice for the purpose of staff
accountability examination.

The Zonal Manager has to give his concurrence to the Staff Accountability
Certificate (Annexure-D) submitted by Branch Manager while scrutinizing the
settlement proposals sanctioned by Branch Manager.

11. GRANTING OF CREDIT FACILITIES IN FUTURE:

No further credit facility in any shape whatsoever will be allowed to the borrower or
guarantor(s) in future. In case the guarantors are already availing credit facilities
and their accounts are classified as "Standard" no further enhancement will be
allowed.

Fresh/additional credit facility to the guarantor(s) will be considered only if the

guarantors themselves were instrumental in getting recoveries through settlement
and their accounts (if already availing credit facility) were classified as standard. A
certificate from BO/ZO has to be provided and further the certificate will be on the
basis of complete analysis of recovery proposal. Such cases, as per this Para are
to be dealt at Head Office Advances Deptt only.

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12. FORMAT FOR PREPARATION OF SETTLEMENT PROPOSAL:

All settlement proposals under the policy shall be prepared on the format enclosed.
(Annexure-B).

13. ACCOUNTING TREATMENT:

Accounting treatment for closure of accounts settled under the policy me is that the
recoveries are first adjusted towards principal amount and the remaining amount is
adjusted towards interest. In TWO accounts the amount upto Book outstanding (As
if no TWO has been done) is to be appropriated in Misc. Income (Recovery in TWO
accounts) and thereafter in Interest income.

14. REPORTING SYSTEM:

All the accounts settled under the policy should invariably be entered in the system
through OTSTWO menu on daily basis.

15. NO DEVIATION FROM THE POLICY:

There shall be no deviation in the above policy.

16. OTHER STIPULATIONS:

i. In case Bank has filed a suit against the borrower/obtained a Decree, Bank’s
satisfaction of its claim may be got recorded in the concerned court only after
closure/settlement of account completely. If case has not been decreed yet, a
consent terms (Consent Decree) should be filed before court.

ii. Wherever the borrower/guarantor/co-borrower/any other affected party has filed

a counter-claim/case against the Bank, such settlement under this policy will be

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considered subject to withdrawal of the case/ claim before intimation of sanction

of settlement proposal, for which sufficient documentary proof may be provided
for Bank’s records.

iii. In all those cases, where settlement proposal is approved and DICGC/
CGTMSE/ ECGC claim has been received and credited in the borrowal account,
recoveries made in the account from the borrower be proportionately remitted to
DICGC/ CGTMSE/ ECGC as per the extant guidelines.

iv. In those cases wherein insurance claim or any other claim on third parties is
received after the sanction of settlement proposal, the amount of sacrifice be
appropriated from the claim amount and the remaining amount, if any, be
credited to the borrower’s account.

v. Accounts where no security is available ab-initio, such cases shall be considered

after taking into consideration the attachable assets/ net means/ credit-
worthiness of borrower/ guarantors and same is to be commented in the
proposal.

vi. While considering settlement proposal as per this policy, the provision held in the
account is also to be mentioned in the proposal.

17. ACTIONS TO BE INITIATED:

A. By Zonal Offices

i. Prepare strategy for follow-up and timely guidance/ support to the branches.

ii. Convene meetings of the branches, starting with the thrust branches immediately
emphasizing the need, salient features of the policy and formulation of result
oriented strategies with the time line.

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iii. Meeting of Enforcement Agencies and Ex-Staff appointed as Resolution Agent

(engaged under LC 254) for bringing eligible cases for negotiation for settlement
through compromise and make efforts for maximizing the cash recoveries.

iv. Guide and monitor the progress on day to day basis by calling for the required
information along-with the details of recoveries made in each individual account.

v. Ensure updation of all the accounts settled by the branches in their zone are
invariably entered in the OTSTWO menu on a daily basis.

B. By Branches

i. Prepare the list of eligible accounts.

ii. To immediately arrange staff meeting in order to motivate and appraise the
details of policy to all staff members.

iii. Accounts covered under the policy may be allocated amongst all staff members
for contacting the borrowers/guarantors, personally and for subsequent
personal/telephonic follow-up for striking compromise proposals in these
accounts during the period of this policy.

18. PUBLICITY OF THIS SETTLEMENT POLICY:

The Zone must also ensure that the policy is popularized among the field
functionaries under their jurisdiction. The same be displayed at all prominent places
in the Branch / ATM on notice Boards. ZM/ BM to ensure that regular reminders to
settle the accounts under the policy be sent to borrowers/ guarantors.

IMPORTANT:- Also BO/ZO are required to maintain record of accounts settled

under the policy for Head Office /Top Management review.

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CHAPTER-II
REG: POLICY FOR SETTLEMENT OF NPA & TWO ACCOUNTS NOT ELIGIBLE
UNDER CHAPTER-I OF THIS POLICY

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1. ELIGIBILITY FOR SETTLEMENT:

All Borrowal/Loan accounts identified as NPA in terms of extant RBI guidelines

outstanding as at the end of last quarter and not eligible under Chapter-I of this
policy will be eligible for considering under this chapter ( Chapter-II) of the
recovery management policy guidelines for compromise / negotiated settlement /
one time settlement and/or write off.

2. FACTORS TO BE CONSIDERED FOR SETTLEMENT:

The following factors/ circumstances would have to be kept in view while

considering a settlement:

i. Borrower’s / guarantor’s bonafide desire to settle the dues.

ii. The period for which the account has not been generating any revenue.

iii. Circumstances which resulted in the account becoming NPA.

iv. Availability/realisability of the securities charged/under lien/attached by a Court.

Further, in case the borrower/ guarantor has been restrained from disposing of
any personal property, by an order of a Court, the same be also kept in view
while negotiating settlement in the account.

v. Status of the activity for which advance was made and present activity/income
generating capacity of the borrower.

vi. The means/ networth of the borrowers/guarantors.

vii.The strength available to the Bank for recovery of dues through legal recourse.

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3. NORMS OF OTS:

It should be clearly borne in mind that where Bank agrees to settle an account in full
& final at any amount less than the total recoverable dues, the case is to treated as
a compromise settlement. The norms for compromise settlements would be as
under:

i) The settlement amount is to be at least equal to the Bench Mark Amount as per
policy and should, preferably be paid in lump sum within 90 days. An official cannot
sanction a settlement proposal within his delegated powers, at an amount which is
less than Bench Mark Amount. It is possible that in certain rare cases due to
specific genuine reasons, the settlement may mature at an amount, which is less
than the Bench Mark amount as per policy. In such cases, reasons and proper
justification thereof should be duly recorded by the Competent Authority while
sanctioning such cases. The Competent Authority in such cases shall be next
higher authority as specified at Para 16 of this chapter.

Notwithstanding the norms of settlement, it should be the endeavour of all

concerned that the account is not settled below the book outstanding so as to
avoid booking any loss. Consideration of such cases i.e. below book o/s
should be based on proper justification/merits by facts/circumstances of each
case.

ii) PAYMENT OF SETTLEMENT AMOUNT IN 90 DAYS:

Where the settlement amount is to be paid by the borrower/ guarantor in lump sum,
the period should not exceed 90 days from the date of intimation of sanction during
which no interest will be charged on the settlement amount. However, the party to
pay additional 10% of settlement amount over and above 5% already deposited at
the time of submission of OTS proposal within maximum 30 days from the date of
intimation of sanction.

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If the borrower/ guarantor defaults in repayment noted above, the benefit of ‘no
interest’ clause will not be available and the settlement amount would carry interest
@ one year MCLR (prevailing on the date of settlement) PLUS 2.5% p.a. wef
the date of sanction, on reducing balance subject to the approval of extension of
time/condonation of delay by the competent authority.

iii) PAYMENT OF SETTLEMENT AMOUNT IN A PERIOD EXCEEDING 90 DAYS:

Where the settlement amount is proposed to be paid in a period exceeding 90 days,

the settlement amount will carry simple interest @ one year MCLR (prevailing on
the date of settlement) PLUS 2.5% p.a., on reducing balance, from the date of
intimation of sanction to the borrower / guarantor. The party to pay additional 10%
of settlement amount over and above 5% already deposited at the time of
submission of OTS proposal within maximum 30 days from the date of intimation of
sanction. The balance settlement amount plus interest, as above, will be payable in
equated monthly/quarterly installments in such a manner that the total repayment
period should not exceed 12 months starting from the date of intimation of
sanction.

If the period of delay in deposit of upfront payment is more than 90 days or of any
one of the monthly installments is more than six months, the settlement will
automatically stand cancelled.

While recommending/approving a settlement proposal involving deviation(s) from

the above norms, reasons/ proper justifications for the same must be recorded by
the concerned officials/authority.

The acceptance of terms and conditions of settlement, by the borrower/

guarantor, must be obtained and kept on record.

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4. CALCULATION OF NOTIONAL DUES

For the purpose of processing a settlement proposal, the notional dues are to be
calculated in the following manner: (Please note that the notional dues are different
from actual Total Recoverable Dues in the sense that the latter include upto date
memoranda interest i.e. actual interest on applicable rates with penal interest, if
any, on compounded basis).

4. a). Suit filed or Non suit filed accounts:-

(Rs. in Lakhs)
i. Principal outstanding as on date of NPA + any other subsequent
debits other than charges and interests (like LC/BG)
ii. + Interest @ one year MCLR + 1.5% p.a. simple or contractual
rate of interest (whichever is lower) on above principal
outstanding after giving due effect of recoveries, if any after the
date of NPA till last completed quarter
iii. + Interest reversed at the time of NPA, if any

iv. + Legal / other charges and amount to be paid to EA

v. Less recoveries effected till date

vi. Notional dues as on last completed quarter as per module

interest approach of the Bank (i+ii+iii+iv-v)

b). Decreed NPA accounts

(Rs. in Lakhs)
i. Suit amount
ii. + Interest as per term of decree or @ one year MCLR + 1.5%
p.a. simple or contractual rate of interest (whichever is
lower) after giving due effect of recoveries, if any from date of
filing suit upto last completed quarter

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iii. + Interest reversed at the time of NPA, if any

iv. + Cost as per terms of decree and other miscellaneous charges
incurred after the date of decree
v. Less recoveries effected till date
vi. Notional dues as on last completed quarter as per module
interest approach of the Bank (i+ii+iii+iv-v)

*The facilities for which separate suit filed / suit yet to be filed, the book o/s is
to be added to NPA amount

c). Appeal / Review/ Revision filed cases

i. In all cases where Bank has preferred review / revision / appeal against the
decree: Irrespective of the interest prayed in review/ revision / appeal, interest is
to be applied at one year MCLR + 1.5% (prevailing on the date of settlement) on
simple basis OR interest awarded in decree against which review/
revision/appeal is preferred, whichever is lower. PLUS costs awarded and
subsequent expenses paid and also payable but yet to be paid.

ii. In all cases where borrower/ guarantor has preferred review/revision/appeal

against decree, interest is to be applied as awarded in decree PLUS costs
awarded and subsequent expenses paid and also payable but yet to be paid.
However, after passing of final order in Revision/Appeal, interest and costs
as decided by Court shall be applicable.

d). In case of Agricultural Loans including decreed cases

(Rs. in Lakhs)
i. Principal outstanding /Suit amount
ii. + Interest @ 7% or interest awarded by the court (whichever
is lower) after giving due effect of recoveries, if any from date of
filing suit upto last completed quarter

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iii. + Interest reversed at the time of NPA, if any

iv. + Cost as per terms of decree and other miscellaneous charges
incurred after the date of decree
v. Less recoveries effected till date
vi. Notional dues as on last completed quarter as per module
interest approach of the Bank (i+ii+iii+iv-v)

In technically written off accounts, all calculations, including the notional dues, shall
be calculated as if no technical write off has been done.

5. VALUATION OF SECURITIES

Before arriving at the realizable value of a property, it should be ensured that

factors such as self occupancy/tenancy/restricted use/pending statutory dues/
demarcation etc have been duly accounted for. Any major variation from the value
at the time of advance must be carefully examined. Any downward variation must
be properly brought on record and the matter must be referred to HO Inspection
Department for scrutiny (For conducting valuation, please refer Circular No. 1726
dated 20.05.2019 in this regard issued by HO Credit Monitoring Department).

6. CALCULATION OF NPV OF REALIZABLE VALUE OF AVAILABLE

SECURITIES:

With the recent introduction of concept of Net Present Value (NPV) as per RBI
guidelines, it has been desired by RBI that the present economic value of financial
assets is reasonably estimated, based on the Net Present Value of the estimated
cash flows associated with the realizable value of the available securities net of cost
of realization. In the Compromise Settlement cases, since the expected cash flows
shall be over a period of time, the Settlement Amount should generally be not less
than the NPV of the realizable value of available securities, arrived in the manner
described hereunder.

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The under noted points must be kept in view in respect of the Valuation report:

i) It should be obtained from Approved Valuer on Bank’s Panel ON THE

PRESCRIBED PROFORMA.

ii) The valuation report must take into consideration various parameters like
location, ownership and occupancy of the properties.

iii) The Report must show Fair Market Value & Realizable Value of securities.

iv) Arriving at realistic value of securities is an important aspect in considering an

OTS. It is thus necessary that, for the purpose of OTS, especially in respect of
the accounts involving Value of securities upto Rs. 5.00 crore, the valuation
report should be as recent as possible but not more than 1 year old.

v) However, in respect of accounts where book outstanding and/or Value of

Securities is more than Rs. 5.00 crore, minimum two independent latest
Valuation Reports (not more than 6 months old) from Bank’s approved
valuers shall be obtained to assess the proposals with more justice.

vi) The Branch incumbent shall visit the site and verify whether the valuation of the
security submitted by the Bank empanelled valuer is fair and reasonable as per
discreet and independent enquiries made during his visit.

Besides Valuation of available securities including securities under lien;

also those attached by an order of a court be invariably considered for
calculating NPV.

Generally, Realizable Value (Net of cost of realization discounted) is less

than Fair Market Value of securities in the range of 10-15%. In some rare

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cases, the realizable value may be less than Fair Market Value by more than
15%. In such cases the Valuer should give proper justification for the same
with cogent reasons, in the valuation report.

Realisable Value which normally should not be less than 85% of the Market
value of the charged securities for the attendant factors affecting its
realisability shall be called Net Present Value of Securities.

CALULATION OF NET PRESENT VALUE (NPV)

The Net Present Value of the Realizable Value of available securities will be
calculated as under:

A. The Realiable Value of the Charged Securities (excluding Plant &

Machinery) net of cost of realization shall be discounted as under:

Sl. Nature of Discount / Attendant Factors Rate of Rate of

No. Discount discount
a) General Discount (Sale through Bank attracts tax 15%
burden/sharing of increase in value of Immovable
Property (IP) with lessor etc. and results in
diminutive realizable value)
b) Specific Discount (Over and above point (a)
above)
i. IPs having old/multiple tenancy/multiple suits and / or 20%
dispute about validity / enforceability of the
mortgage/charge
ii. More than 1 year old stay against SARFAESI Action 10%
and/or SARFAESI action initiated and IPs put on
auction but auction failed as no bidder came forward.
iii. Attachment of IP by Sale Tax / Income Tax / Other 10%

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Revenue Authority(If there is no priority charge)

iv. IP not demarcated/Undivided Share mortgaged/no 10%
independent Access
v. Mortgagor is dead 10%

The maximum discount under category (a) (General Discount) & category
(b) (Specific Discount) having more than one attendant factors attached to
IP shall be restricted to 40% only.

SPECIAL TREATMENT FOR NPAs SECURED BY AGRICULTURAL

PROPERTY

Under Section 31, the provisions of SARFAESI Act do not apply to any security
interest created in agricultural land. Further, on the basis of feedback received
from the field functionaries, it has been observed that the realisability of
agricultural property is a difficult and time consuming process. Due to these
factors, restricted use of the land i.e. only for agriculture purpose, and the
localized factors, it is comparatively difficult to realize the security of agricultural
land. Considering all these factors, such cases need to be given a special
treatment while calculating the NPV of the realizable value of agricultural
property.

Hence, it has been decided that while considering a settlement proposal in such
NPA accounts, the competent authority may calculate NPV after treating the
anticipated period of realization of agricultural property as beyond three years.
Accordingly, NPV of agricultural property may be taken @ 60% of the
realisable value.

FOR PLANT & MACHINERY:

A. In case of Plant & Machinery, Realizable Value is to be taken into

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consideration after taking cognizance of brand name/make of Plant &

Machinery/Year of installation/Original cost/ Depreciation/ Current physical
conditions/technical changes and obsolescence/ present industry scenario and
future viability etc.

B. Where 2 or more Bids under SARFAESI have failed, the last Reserve Price
(fixed in the last one year) or NPV as above, whichever is lower, shall be
accepted as NPV.

C. In Consortium/Multiple Banking Accounts, Bank’s share in Valuation adopted

by Consortium/Joint Lenders shall be accepted as NPV.

7. CALCULATION OF MRA (MINIMUM RECOVERABLE AMOUNT)

The minimum recoverable amount is calculated on the basis of six parameters,

as per the following module:

(+) Points (-) Points

Unit/activity financed by bank is Unit/activity financed by bank is not
working working
Realisable value of available Realisable value of available
securities** is over 2 times the book securities** is upto 2 times the book
o/s*** o/s***
Borrower's/ Guarantors' means to Borrower's/ Guarantors’ means to
repay the notional dues are good**** repay notional dues are not good****
Notional dues are upto 2 times the Notional dues are over 2 times the
book o/s book o/s
Age of the a/c since turning NPA is Age of the a/c since turning NPA is
upto 2 years* over 2 years*
Legal position of the bank is sound Legal position of the bank is weak
*The reference date for the purpose of calculation of the age would be the
quarter end during which the a/c was categorized as NPA.

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** The available securities would mean the securities charged to the Bank by way
of hypothecation/mortgage/charge/lien/negative lien PLUS those under general
lien and attached by order of a Court. However, in case the borrower/ guarantor
has been restrained from disposing of any personal property, by an order of a
Court, the same may not be treated as ‘available security’ for the purpose of
calculation of NPV but it may be also kept in view while negotiating settlement
in the account in the facts and circumstances of the case.

***In Technically Written Off accounts, the book o/s would mean the present
book o/s as if no technical write off had been done.

**** Borrowers /guarantors mean to repay to be taken negative if unit is not

working and OTS amount is paid through sale of mortgaged assets.

i) In terms of RBI guidelines and banks adopted policy, the accounts

where NPV of the charged securities is more than or equal to
Notional Dues, the Benchmark Amount will be equal to Notional
Dues.

ii) In all other accounts (i.e., accounts where no charged / attached

security is available or where the NPV of the charged property is less
than the Notional Dues), the MRA will be calculated as per six point
parameters mentioned in the existing policy. Based on the MRA so
arrived at, Benchmark will be calculated as detailed below:-
Add one point for each plus point aspect relevant to an A/c and deduct one point
for every minus point aspect and obtain the net score.

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POINTS LINE OF APPROACH TO COMPROMISE

SCORED
+6= Book o/s + Interest reversed / derecognized in the account +
simple Intt. @ 1.5% ABOVE ONE YEAR MCLR w.e.f. the date
upto which intt. is included in book o/s, after accounting for any
fresh debits & credits (except intt) + litigation exp + other present &
future expenses on account of SARFAESI Act/ Recovery Agents/
Detective Agents etc.
+4= Book o/s + Interest reversed / derecognized in the account +
simple Intt.@ 1% ABOVE ONE YEAR MCLR w.e.f the date upto
which intt. is included in book o/s, after accounting for any fresh
debits & credits (Except Intt.) + Lit. exp. + other present & future
expenses, if any, on account of SARFAESI Act/ Recovery agents/
Detective Agents etc.
+2= Book o/s + Interest reversed / derecognized in the account +
simple Intt. @ 0.5 % ABOVE ONE YEAR MCLR w.e.f the date
upto which intt. is included in book o/s, after accounting for any
fresh debits/credits (except Intt.) + lit.exp. + Other present & future
expenses, if any, on account of SARFAESI Act/ Recovery agents/
Detective Agents etc.
0= Book o/s + Interest reversed / derecognized in the account + lit.
exp + other present & future expenses, if any, on account of
SARFAESI Act/ Recovery agents/ Detective Agents etc
-2= 75% of (Book o/s) + Interest reversed / derecognized in the
account + lit. Exp. + Other present & future expenses, if any, on
account of SARFAESI Act/ Recovery agents/ Detective Agents etc
-4= 50% of (book o/s) + Interest reversed / derecognized in the
account + Lit. exp. + other present & future expenses, if any, on
Account of SARFAESI Act/ Recovery agents/ Detective Agents etc
-6= Write off#. However, the write off should be the last resort after
considering all the relevant factors in totality.

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* The book o/s shall mean the present book o/s. In Technically Written Off
accounts, the book o/s would mean the present book o/s as if no technical write
off had been done.
** The MCLR at the time of settlement shall be applicable
# For write off in technically written off accounts, refer Para 14 & 15 of this
chapter.

8. BENCHMARK AMOUNT FOR SETTLEMENT

(i) MRA as above Rs.__________

(ii) NPV as above Rs.__________
(iii) Bench Mark Amount (Higher of (i) & (ii)) Rs.__________

Where the NPV happens to be more than the Notional Dues; the NPV will be
restricted to Notional Dues and Bench Mark will be fixed accordingly.

9. UPFRONT / DOWN PAYMENT

Party has to deposit upfront payment to show seriousness in settlement of OTS

Proposal. The upfront amount may be kept in an ‘Escrow/ ‘No Lien Account’ with a
mandate to appropriate the proceeds towards adjustment of the dues in the event of
acceptance of OTS proposal.

The upfront amount will be taken as follows:-

(i) 5 % of the amount is to be deposited at the time of submission of OTS proposal

which will be kept in “No Lien” account. The same will be appropriated in case if the
OTS proposal is accepted by the bank.

(ii) 10% of the OTS amount has to be deposited within 30 days of receipt of
intimation of acceptance of OTS proposal to the party. This amount will be over and

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above the 5% amount deposited by the party at the time of submission of OTS
proposal, thus making the total to 15%.

10. (A) REPAYMENT OF SETTLEMENT AMT. WITHIN 90 DAYS:

Where the settlement amount is to be paid by the borrower / guarantor in lump sum,
the period should not exceed 90 days from the date of intimation of sanction during
which no interest will be charged on the settlement amount. However, the party shall
have to deposit upfront amount within 30 days of intimation of sanction unless delay
is permitted by the competent authority.

If the borrower/ guarantor defaults in adjusting the account within 90 days, the
benefit of ‘no interest’ clause will not be available and the settlement would, ab
initio, be treated as settlement involving a period longer than 90 days. In such
‘default’ cases, the sanctioning authority can grant the maximum repayment period
of 12 months on the terms applicable to this category of settlements and further
extension/condonation can also be allowed, as per para 11 of policy.

(B) REPAYMENT OF SETTLEMENT AMT. IN A PERIOD EXCEEDING 90 DAYS:

Where the settlement amount is proposed to be paid in a period exceeding 90 days,

the settlement amount will carry simple interest @ one year MCLR (prevailing at the
time of settlement) PLUS 2.5% p.a., on reducing balance wef the date of intimation
of sanction to the borrower/ guarantor till the account is adjusted in full and final.
The sanctioning authority must stipulate in the sanction itself, the date upto which
the upfront minimum payment (10%), over & above the 5% deposited at the time
of submission of OTS proposal, is to be made by the borrower/ guarantor, which, in
no case should exceed 30 days from the date of intimation of sanction, unless delay
is permitted by the competent authority. The balance settlement amount plus interest
is to be repaid in equal monthly/quarterly installments in such a manner that the total
repayment period should not exceed 12 months starting from the date of intimation

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of sanction. For this, the borrower/ guarantor should furnish post-dated cheques,
except in cases where the borrower/ guarantor has proposed to repay the amount
from sale proceeds of some property or the amount is to be paid out of the sale
proceeds of the mortgaged/attached security (ies).

11. EXTENSION OF PERIOD/CONDONATION OF DELAY IN PAYING UPFRONT

AMOUNT/SETTLEMENT AMOUNT IN SETTLEMENTS

(A) EXTENSION/CONDONATION OF DELAY IN PAYING UPFRONT AMOUNT:

The normally acceptable time in making the initial upfront payment amount is 30
days. However, there can be cases where, due to some reasons, there is a delay in
making initial down payment. In such cases delay upto 30 days can be allowed by
BM. Delay beyond 30 days but upto maximum 90 days can be permitted by Zonal
Manager (Asst General Manager Law & Recovery in case of ARB-I, New Delhi) in
cases sanctioned by BM/ZO and by GM (L&R) in cases sanctioned by HO.

Further, there can also be cases where the delay in making down payment is over
90 days but the full settlement amount is received within the approved period of the
settlement. In such cases delay can also be permitted by Zonal Manager in cases
sanctioned by BM / ZO and by GM (L&R) in cases sanctioned by HO.

(B) EXTENSION/CONDONATION OF DELAY IN PAYING SETTLEMENT AMOUNT:

The normally acceptable time in making payment of settlement amount alongwith

interest is 12 months w.e.f. the date of intimation of sanction to the borrower/
guarantor. If the sanction initially stipulates a repayment period less than 12 months,
the same can be extended/condoned upto 12 months by the sanctioning authority.
There can also be cases where there is delay in repayment of settlement amount
with interest which was initially sanctioned upto 12 months but the same is paid/

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proposed to be paid within a total repayment period of more than 12 months but not
exceeding 24 months.

In such exceptional cases after recording proper justification, an extension/

condonation of delay can be considered as under, subject to charging interest at
one year MCLR (as applicable at the time of settlement) PLUS 2.5% p.a.,
compounded monthly, on the defaulted amount for the period of delay, beyond the
12 months period (during which the interest would be chargeable on simple basis).

SETTLEMENT EXTENSION/ EXTENSION/ EXTENSION/ CONDO NATION

CONDONATIO CONDONATION OF OF DELAY IN ADJUSTING THE
SANCTIONING N OF DELAY DELAY IN ADJUSTING ACCOUNT
AUTHORITY IN ADJUSTING THE ACCOUNT (BEYOND THE 12 MONTHS
THE ACCOUNT (BEYOND THE 12 MONTHS PERIOD ) :
SUBJECT TO PERIOD ) BY MORE THAN SIX MONTHS
THE TOTAL BUT UPTO 12 MONTHS i.e. TOTAL
REPAYMENT UPTO SIX MONTHS REPAYMENT PERIOD OF 24
PERIOD OF 12 i.e. TOTAL REPAYMENT MONTHS
MONTHS PERIOD OF 18 MONTHS

BRANCH- IN-CHARGE ZONAL MANAGER GM as ZM

(IRRESPECTIVE OF
SCALE) RESPECTIVE
GM(L&R)
OFFICIALS UPTO THE GM as ZM
SANCTIONIN
RANK OF DGM IN Z.O./
HO(L&R)
G

GM as ZM/ GM(L&R) AUTHORITY GM(L&R) ED

ED ED

MD& CEO/MC/ BOARD MD & CEO

12. CREDIT OF CONCESSIONS IN SETTLEMENT APPROVED ACCOUNTS:

The approved concessions will be allowed only at the time of full and final
adjustment of the accounts i.e. only after entire settlement amount with interest has
been received as per sanction.

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13. ACCOUNTING PROCEDURE:

Recovery in all the NPAs shall be first appropriated towards principal amount
outstanding in the account, till the balance is reduced to Rs.1000/-. Further recovery,
if any, is to be credited to Interest on loans & Advances. However, in T.W.O.
accounts, which shows a nominal o/s of Rs 100/- only, the recovery effected be
straightaway credited to “Misc. Income - Recovery in T.W.O. A/cs” (GL Code –
361075)” upto the amount technically written off. Thereafter, amount recovered shall
be credited to “Interest on Loan and Advances in T.W.O. A/cs” (GL Code: 311100).

It is clarified that income is to be booked only for the realized part of Memoranda
interest. Rebate refers to the un-realized part of the Book Outstanding. As such, in
case of T.W.O accounts, rebate is merely a notional figure and is not reflected in the
GL.

14. DELEGATION OF POWERS:

The delegated powers to the field functionaries and other executives for granting
notional concession, while approving settlement/write off proposals are as under:

Functionaries Amount Particulars

(In Lakhs)
Scale –II Branch Head 1 Total relief to be allowed only in
Recorded Interest and Miscellaneous
Charges
Scale –III Branch Head 2 Total relief inclusive of Principal +
(Max rebate is capped at 25% Recorded Interest + Miscellaneous
of Book o/s) Charges
Scale –IV Branch Head / ZO / 5 Total relief inclusive of Principal +
HO(L&R) Recorded Interest + Miscellaneous
Charges

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Functionaries Amount Particulars

(In Lakhs)
AGM as Branch Head / ZO/ 30 Total relief inclusive of Principal +
HO(L&R) Recorded Interest + Miscellaneous
Charges
DGM at ZO/ HO(L&R) 40 Total relief inclusive of Principal +
Recorded Interest + Miscellaneous
Charges
GM(L&R)/ GM as ZM 50 Total relief inclusive of Principal +
Recorded Interest + Miscellaneous
Charges
ED 75 Total relief inclusive of Principal +
Recorded Interest + Miscellaneous
Charges
MD & CEO 100 Total relief inclusive of Principal +
Recorded Interest + Miscellaneous
Charges
MANAGEMENT COMMITTEE FULL POWERS

POWER TO WRITE OFF THE O/S IN ACCOUNT

The lowest authority to sanction a write off proposal is Chief Manager (Scale IV) as
Branch Incharge or at higher office. However, write off of an account should be
considered after proper evaluation of the peculiar circumstances of the case
necessitating such decision, e.g.

a) Party’s activity has been closed and party is not doing any activity/does
not have the capacity to pay anything.
b) The borrower/guarantors have expired/not available.
c) No security is available either by way of charge/lien/restraint/attachment.
d) Legal action is not possible
e) All possible avenues of recovery have been exhausted.

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Further, before writing off an account, the aspect of staff accountability must be
finalized.

Official of the rank of Scale II and above, to whom HO Advances Deptt. has
delegated lending powers of a higher rank, shall also have powers of that higher
rank, for granting notional concession in NPAs.

It is clarified that:

i) No official can exercise the above-delegated powers in accounts in which credit

facilities had been sanctioned/enhanced by him. Such cases may, however, be
considered by other official of the same/higher rank (in controlling offices/Head
Office) and by the next higher authority (for BM power cases) as per the powers
delegated under the policy.

ii) Any settlement proposal at an amount more than the notional dues (as explained at
Para 4 of this chapter of the policy) but within the laid down norms shall fall under
the powers of Branch In-charge (Scale II and above). However, proposal for such
settlement shall be prepared and submitted to next higher authority for information
and review.

iii) Irrespective of the module score, an official in Scale II or III working as Branch In-
charge is not authorized to sanction either a write off proposal or a settlement
proposal at an amount less than as calculated hereunder:

Book o/s PLUS All litigation & other expenses paid and payable but yet to be paid,
not included in book o/s MINUS ECGC/DICGC/CGFT claim to be
retained/appropriated in account.

(In Technically Written Off accounts, the book o/s would be as if no technical write
off had been done)

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15. WRITE OFF OF TECHNICALLY WRITTEN OFF (T.W.O.) ACCOUNTS:

The delegated powers, stated in Para 14 above, do not apply in write off proposals
of T.W.O. accounts. The cases otherwise falling within powers of the field
functionaries not below the rank of GM, as calculated on the basis of Amount
Technically Written Off + Memoranda Interest accrued in the account PLUS all
expenses i.e. total recoverable dues, can be written off by the authority, as under
after he is satisfied that all avenues of recovery have been fully exhausted and there
is no security left to fall back upon
(AMOUNT IN Rs. LAKHS)
MANAGEMENT COMMITTEE FULL POWERS
MD & CEO 100
ED 75
GM (L&R) 50
GM AS ZM 30

It should, however, be the endeavour of the competent authority to avoid actual write
off of the T.W.O accounts and continue efforts for recovery.

16. CASES BEYOND THE LAID DOWN NORMS:

The respective decision making authorities will approve the settlements, based on
the norms, within their discretionary powers. The cases which are beyond the laid
down norms can be considered for approval by next higher authority after recording
proper justification for deviations from the norms.

It is to be noted that the `respective decision making authority' means the authority
`by designation' (as per the delegation of powers) and not `by office'. Accordingly, an
official can approve a proposal, which is beyond norms of policy but otherwise falling
under the powers of a lower authority ‘by designation’.

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EXAMPLES:

OFFICIAL POSTED AT CAN SANCTION A PROPOSAL INVOLVING

DEVIATION BUT NOTIONAL CONCESSION
OTHERWISE FALLING UPTO THE POWERS OF
BRANCH:
SR.MGR SCALE III MANAGER SCALE II (irrespective of whether a Scale
(BRANCH INCHARGE) II official is posted at the branch or not)
BRANCH:
C.M. SCALE IV (BRANCH SR.MGR SCALE III (irrespective of whether a Scale
INCHARGE) III official is posted at the branch or not)
Z.O.: CHIEF MANAGER SCALE IV (irrespective of whether
AGM SCALE V a Scale IV official is posted at the Zone or not)
Z.O. AGM SCALE V (irrespective of whether a Scale V
DGM SCALE VI official is posted at the Zone or not)
H.O.: DGM SCALE VI (irrespective of whether a Scale VI
GM SCALE VII official is posted at the Head Office or not)

17. SETTLEMENT PROPOSALS IN STAFF CONNECTED ACCOUNTS/ DIRECTORS’

RELATIVES CASES

i) All settlement proposals in which any staff member and/or his/her relation is
connected in any way, but the notional concession is otherwise within the powers of
a functionary below the rank of ED, will be placed before ED for seeking permission
to mark the case within the powers of that functionary. Screening/ sanction of the
case will continue to be done by the appropriate committee/ authority in whose
power the notional concession, otherwise falls.

Explanation: For the purpose of settlement of an account, staff members shall

mean the serving staff members AND ex-staff members, whose terminal dues are

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withheld/have not been paid but shall NOT include ex-staff members receiving
pension.

It is further clarified that, for the purpose of this Para, an account will be treated as
staff connected in either of the following circumstances:

a) Accounts in the name of staff members and/or his/her spouse.

b) Accounts guaranteed by a staff member or where an undertaking from the staff
member for repayment of loan, is on record.

ii. Restrictions on Power to Remit Debts in case of Directors

Section 20A of the Banking Regulation Act, 1949 stipulates that notwithstanding
anything to the contrary contained in Section 293 of the Companies Act, 1956, a
banking company shall not, except with the prior approval of the Reserve Bank of
India, remit in whole or in part any debt due to it by -

a) Any of its directors, or

b) Any firm or company in which any of its directors is interested as director,
partner, managing agent or guarantor, or
c) Any individual, if any of its directors is his partner or guarantor.

Any remission made in contravention of the provisions stated above shall be void
and have no effect.

18. SETTLEMENT OF INDIVIDUAL ACCOUNTS BELONGING TO A GROUP

Several accounts of a ‘group’ can be considered for OTS separately provided the
common security charged is agreed to be released only after full and final
adjustment of all the accounts of the group. Separate powers as at para 14 and 15
can be exercised for separate accounts though belonging to the same group.

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19. SETTLEMENT OF GROUP/CONNECTED ACCOUNTS:

In case OTS proposal involves more than one borrower and different set of
securities are charged in respect of facility to different borrowers or where residual
value of a security which is charged in one borrowal account is taken as security in
other account, in such cases the module score be calculated separately for facilities
extended to each borrower separately for calculation of Benchmark settlement
amount.

20. SETTLEMENT IN CONSORTIUM ACCOUNTS

i) In cases where OTS has been negotiated by all members of consortium and other
banks are in the process of approval, the OTS approved by our Bank would be
effective from the date of last sanction given by other consortium members.
However, if the gap in sanctions of our bank and last bank is more than 6 months,
our sanction shall be placed before the sanctioning authority for revalidation. Terms
of payment of interest shall also be effective taking into consideration the date of
revalidation/date of sanction by the last Bank.

ii) In cases where OTS has been negotiated/ sanctioned on standalone basis, terms
and conditions approved by the sanctioning authority for payment of OTS amount
and interest shall prevail without any reference to consideration of OTS by other
member banks. Sanctioning Authorities may generally stipulate a condition of ‘Right
of Recompense’ if the terms of OTS offered to other lenders are better than the offer
made to us.

21. TREATMENT OF CASES OF FRAUD/WILFUL DEFAULT:

In respect of the accounts in which Head Office has declared fraud and/ or willful
default by the borrower, every effort should be made to recover total recoverable
dues including contractual rate of interest. However, after taking all the relevant

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factors into consideration, such cases may be considered for compromise settlement
only on merits and that too in respect of only the civil / financial liability of the
borrower / guarantors by applying commercial judgment in the best interest of the
Bank. The criminal cases pending against such borrowers are to continue to their
logical end. The competent authority for considering settlement proposal in above
type of cases shall be as under:

-All cases involving notional

Concession upto the powers of MD &CEO : MD & CEO

-Other cases : Management Committee of the Board

After lodging of FIR / Criminal complaint, if the case stands closed by

Police/Investigating agency/Court and no investigation is pending, OTS proposals in
such cases shall be considered in normal course as per the delegated powers as if
no fraud was declared.

22. FORMATION OF SETTLEMENT ADVISORY COMMITTEES (SAC).

(A) AT BO/ZO LEVEL: The SAC for recommending settlement/write off proposals
under the powers of an official at ZO/BO shall be constituted by the Incharge of
the respective office and will consist of three officials out of the ranks
immediately lower to the sanctioning authority. The constitution of SAC should
also provide for substituting another member in case the full quorum is not
available. It is, however, to be ensured that the official who had
sanctioned/enhanced the credit facilities in the case at any point of time is not a
member of the SAC.

(B) AT HO LEVEL: The Settlement Advisory Committees for cases falling under
HO powers would be constituted with the approval of MD & CEO. The SAC for
MC/ Board / MD&CEO/ ED power cases would comprise of three General

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Managers. In case of GM / DGM power cases would comprise of three officials

out of the ranks immediately lower to the sanctioning authority.

In addition, all cases involving notional concession beyond Rs 50.00 Lakhs will
also be placed before Independent Settlement Advisory Committee (ISAC)
which would be constituted with the approval of Board. This committee would
comprise of GM (L&R) as Convener, one retired Banker (minimum rank as
General Manager) and one retired Judge of High Court.

23. EXAMINATION OF STAFF ACCOUNTABILITY

It is essential that in all cases of settlement/ write-off, endeavor should be made to

first finalize the staff accountability aspect and necessary disciplinary action,
wherever warranted, must be taken against the erring staff members in a time bound
manner by the concerned ZM. In cases where in a settlement proposal has been
received for consideration and staff accountability has not been looked into, a
certificate shall suffice for the purpose of staff accountability examination.

-The staff accountability certificate is to be signed by the ZM (in HO power cases)

and by the BM, bearing the concurrence of Zonal Manager (in ZO and BO power
cases).

-No settlement proposal will be submitted to the competent authority unless it is

accompanied by staff accountability certificate.

Further, in case settlement proposal is submitted before Competent Authority in the

absence of Staff Accountability Report, the concerned Zonal Manager/Branch
Manager (as the case may be) shall give an Undertaking on the following lines while
recommending proposal:

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“We hereby undertake to complete Staff Accountability in the case and initiate
appropriate Disciplinary Action within 30 days of sanction of settlement proposal in
the case”

24. GRANTING OF CREDIT FACILITIES IN FUTURE:

No further credit facility in any shape whatsoever will be allowed to the borrower or
guarantor(s) in future. In case, the guarantors are already availing credit facilities
and their accounts are classified as "Standard" no further enhancement will be
allowed. Fresh/additional credit facility in case of guarantor(s), where the
guarantor(s) are not availing credit facilities or are already availing credit facilities,
will be considered only if the guarantors themselves were instrumental in getting
recoveries through settlement and their accounts (if already availing credit facility)
were classified as standard. Such cases can be considered at Head Office only.

It is clarified that the cases involving i) waiver of penal interest and overdue interest,
ii) rectification of the interest rates charged in the past, iii) concessions in the future
rates of interest only under a rehabilitation package of a sick industrial
company/ weak unit/ sick SSI unit, iv) adjustment of an account under an interest
subsidy scheme/other subsidy schemes announced by the Government and v)
refund of DICGC/ECGC/CGTMSE guarantee fee wrongly debited to the account will
not be considered as settlement cases for the purpose of this Para and hence will
continue to be eligible for credit facility in future.

25. FORMAT FOR PREPARATION OF SETTLEMENT/WRITE OFF PROPOSALS:

All settlement/write-off proposals, irrespective of the approving authority, shall be

prepared on the format enclosed with the circular.

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26. AUTHORITY TO REJECT PROPOSAL

Notional Dues as on date of offer of Authority to decline the offer

settlement
Upto Rs.10.00 Lakhs BM
Above Rs.10.00 Lakhs and upto Rs.2.00 Zonal Manager / CM(ARB) /
Crores AGM(ARB)
Above Rs.2.00 Crores and upto Rs.5.00 GM (L&R)
Crores
Above Rs.5.00 Crores GM – Settlement Advisory Committee

27. GUIDELINES FOR RELEASE OF SECURITY/ GUARANTOR

i. Discharge of liability of one or more Guarantor / Release of Charge on

Mortgaged Property/Plant & Machinery may be considered by the competent
authority. Indicative OTS amount shall not be calculated as in the case of other
accounts.

ii. In suit filed cases, on receipt of the approved amount the bank may make a prayer
for release of the said guarantor/security to the Court/DRT. However, suit against
the firm/company and other obligants i.e. guarantor(s)/ borrower(s)/ legal heir(s) etc.
shall continue subject to adjustment of part amount so recovered.

iii. On receipt of the amount from the parties, suitable letter/ No Dues Certificate would
be issued to them releasing their liability as one of the co-obligants

RELEASE OF SECURITY

i. For release of IP/Plant & Machinery for sale, NOC may be given after execution of
tripartite agreement between Bank, mortgagor and proposed purchaser with the

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condition that purchase consideration shall be deposited directly with the Bank.
However, title deeds shall be released only after receipt of approved amount in full.

ii. Wherever release of security is sought, the amount offered should not be less than
the Fair Market Value (FMV) of security as per the valuation report which is not
more than six months /one year old (depending upon the value of security, Ref: -
Para 6) as on the date of proposal or the total dues in the account whichever is
lower.

iii. The bank to exercise utmost care while taking a call to release a particular security
particularly the Residential Houses of the co-obligants as these are quite critical
and sensitive to the overall recovery in the account.

iv. Cases where the realizable value of property depreciates by more than 30 % from
the time of last sanction / enhancement, should be dealt as per the guidelines laid
down in Law Circulatory Letter no 56 dated 08.05.2013. The cases would be
considered only after submission of the report by the committee to the competent
authority and inspection department.

v. The competent authority to release the security will be as follow:

Sr Particulars Competent Authority

No.
1 Cases sanctioned upto the level of Zonal Manager/ CM(ARB) /
ZM AGM(ARB)
2 Cases sanctioned by GM /ED / Sanctioning Authority
MD &CEO/ MC

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RELEASE OF GUARANTOR

i. In case of discharge of one or more guarantors, his/their position as obligant

(technical director etc.) and present means (income/attachable assets) should be
kept in view

ii. The bank to exercise utmost care while taking a call to release a personal liability of
any guarantor as these are quite critical and sensitive to the overall recovery in the
account

iii. The competent authority to release the personal liability of guarantor whose property
is to be released will be as follow:-

Sr. Particulars Competent Authority

No.
1 Cases sanctioned upto the level of Next higher authority
ZM/ GM /ED / MD & CEO
2 Cases sanctioned by MC Sanctioning Authority

28. AUTHORITY TO WAIVE LEGAL ACTION

In case the competent authority feels that no useful purpose will be served by filing
suit against the borrower due to non availability of any security or whereabouts of
the borrower / guarantors are not known / traceable and / or the obligants do not
have means to repay the dues of the bank and initiating the legal action will amount
to spending good money for bad money, the competent authority may decide for
waiver of legal action.

While taking decision for waiver of legal action, full facts of the case, staff
accountability, availability of the security & other circumstances be kept in view and
proper record thereof be maintained.

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(i) Zonal Manager is empowered for waiver of legal action in case of non performing
advances under sponsored schemes / retail credit product schemes and in respect
of accounts classified as loss assets or where tangible security is not available to
fall back upon or whereabouts of borrowers / guarantors are not traceable and also
in cases with total recoverable upto Rs.1.00 Lakhs and where Zonal Manager feels
that it will not be worthwhile to file recovery suits against them. In cases where
ECGC/CGTMSE/DICGC cover is available, legal action can be waived only with the
prior consent of concerned institution.

(ii) In other cases not falling under No.(1) above and involving total recoverable upto
Rs.5.00 Lakhs, GM’s committee (SAC) constituted for recommending proposal for
OTS, may consider recommendation of ZM and give its recommendation to
GM(L&R) who will be the competent authority to waive legal action in such cases.

Along with the proposal for waiver of legal action, a proposal to write – off the said
account may also be moved and on approval of waiver of legal action the said
proposal to write off be considered upon the merits of the case. The authority to
sanction a write-off proposal in such accounts is Branch Incharge ARB / Zonal
Managers.

29. MANAGEMENT INFORMATION SYSTEM

In order to regularly review/monitor the sanction of OTS/write off cases and progress
of recovery in settled accounts, a statement is required to be submitted by Branch
Incharge to ZM and by ZMs to HO Law & Recovery Department within a period of 10
days of the close of month.

GENERAL MANAGER (L&R)

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“Annexure-A”
PUNJAB & SIND BANK
(A GOVT. OF INDIA UNDERTAKING)

BRANCH OFFICE:
ZONAL OFFICE:
DATED:

The Zonal Manager

The General Manager,
Punjab & Sind Bank,
Zonal Office/HO L&R Deptt,
………………….

Dear Sir,

REG:SETTLEMENT PROPOSAL OF SMT. / SH. / M/S__________________________

BO___________________UNDER CHAPTER-_____ OF BANK’s RECOVERY
MANAGEMENT POLICY CIRCULATED VIDE LAW CIR.
NO.________DATED_________________ .

We enclose herewith the undernoted documents, complete in all respects, regarding the
above settlement proposal. WE ARE ALSO SIMULANEOUSELY SENDING YOU A
SOFT COPY OF THE PROPOSAL THROUGH E MAIL*:
1.Proforma of settlement proposal completely filled up.
2. Copies of ALL the sanction letters of credit facilities.
3. Copy of latest visit report by bank official to party’s unit/activity.
4. Copy of party's request letter for settlement.
5. Copies of financial papers of party's activity for the last three years, if the unit is
working.
6. Copy of the plaint.

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REG: SETTLEMENT PROPOSAL IN THE ACCOUNT OF Sh./ Smt. / M/s

…………………………...BO……………………
7. Copy of decree.
8. Copy of execution of decree, if filed.
9. Copy of appeal, if filed, against decree
10.Copy of attachment/restraint order issued by court.
11.Latest valuation reports from Bank’s approved valuer in respect of ALL the securities
available by way of charge/attachment/restraint with specific reference to their fair
market values.
12. Staff accountability.

We also assure that any further papers/information required for expeditious disposal of
the proposal would be submitted without delay.

Yours faithfully,

BRANCH INCHARGE/
ZONAL MANAGER/

*There can be instances where a proposal, under HO powers, prepared by the

branch requires some changes/corrections. The Zone must ensure to make
appropriate changes therein before forwarding a soft copy of such proposal to
HO L&R Deptt.

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“Annexure-B”
PUNJAB & SIND BANK
(A GOVT. OF INDIA UNDERTAKING)

REG: SETTLEMENT PROPOSAL OF SMT. / SH. /

M/S__________________________ BO___________________UNDER CHAPTER-I
OF BANK’s RECOVERY MANAGEMENT POLICY CIRCULATED VIDE LAW CIR.
NO.________DATED_________________ .
BRANCH OFFICE: _____________
DATED: ______________
CLASSIFICATION OF A/c:______________
1 Name of the Borrower
2 Account No.
3 Group, IF ANY.
4 -Date & amount of facilities last
sanctioned/enhanced
-Sanctioning Authority
5 NPA date
6 -Date /Amount of Suit
-Date/Amount of Decree
-Date of Execution filed, if any
-Action under Securitization Act/
7 Whether any consent decree has been
obtained in Court
8. Whether Wilful Default/ Fraud declared by
Bank
9 Whether the a/c is staff
connected/guaranteed

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10. a) Present value of securities & date of

Valuation of the securities of movables/
immovable/ stocks / plant and
machinery, etc:
b) Valuation done by:
c) Date of Valuation:
11. Amt. of DICGC/CGTMSE/ECGC claim, if
any, appropriated in the account at the
time of NPA
12. Present Book O/s as on date
13. Provision held in account
14. Notional Dues as on date
15. Waiver (14-18-16)
16. Rebate (12-18)
17. Notional Concession (15+16)
18. Settlement Amount
(Calculated as per point no.20)
19. Offer of the party

20. STATISTICS OF THE PROPOSAL

To be specific, the settlement amount is to be calculated as under:
S. ITEM AMOUNT
No.
i. Principal Amount O/s as on date of settlement

ii. ADD Amount of DICGC/CGTMSE/ECGC claim, if any,

which was credited to the account on/after date of NPA
iii. Present Book O/S (i+ii)

iv. Applicable % as per Para No. 4 ( of main policy) of

Book o/s as arrived at Point No. iii

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v. ADD Litigation expenses and all other expenses incurred

(whether paid or payable) which have not been
accounted for in the book outstanding.
vi. Settlement Amount ( iv + v )

Sharing of the recovery with DICGC/CGTMSE/ECGC would be done as per the extant
guidelines on the subject.

21. STATUS OF CONNECTED ACCOUNTS, IF ANY.

22. DETAILS OF ANY PREVIOUS SETTLEMENTS MADE WITH THE PARTY AND
THE FATE THEREOF.

23. CERTIFICATION BY BRANCH INCHARGE: It is certified that

a) The facility in the account has not been sanctioned/ enhanced by the present
BM.

b) No fraud/willful default have been declared in the account by the Bank.

c) As on date no settlement, if any, earlier approved in the account is in force.

d) There is no deviation from the laid down norms of the present policy.

e) No consent decree in the account has been obtained in any court.

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f) The account is neither staff connected nor staff guaranteed.

g) All possible efforts have been made for recovery of dues and the present
proposal is in the best interest of bank.

24. BRANCH INCHARGE COMMENTS FOR APPROVAL OF SETTLEMENT

PROPOSAL

BRANCH INCHARGE

25. ZONAL MANAGER COMMENTS FOR APPROVAL OF SETTLEMENT

PROPOSAL

ZONAL MANAGER
DATED:

Note: Comments and signature of Zonal Manager is desired only if the sanctioning
authority is Zonal Manager derived as per point no. 2 of this circular.

All the accounts settled under the policy should invariably be entered in the
system through OTSTWO menu on daily basis & for this purpose notional dues
and notional concession as on date of settlement has to be calculated separately
as per Bank’s Recovery Management Policy.

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“Annexure-C”
PUNJAB & SIND BANK
(A GOVT. OF INDIA UNDERTAKING)
DATED:
REG: SETTLEMENT PROPOSAL IN THE ACCOUNT OF M/s …………………BO:…………….
UNDER CHAPTER-II OF BANK’s RECOVERY MANAGEMENT POLICY IN TERMS OF
LAW CIR. No. .........DATED ……...
UNDER THE POWERS OF:
SUMMARY
1
Name of the Borrower
2 Group
3 Branch/Zonal Office
4 Dealing with Bank since
5 Facilities last Sanctioned/enhanced
Date & Authority of last sanction/enhancement
6 Activity at the time of sanction
7 Present Activity
8 Reasons for account turning NPA
9 NPA Since
Date /Amount of Suit
Date/Amount of Decree
Date of Execution filed, if any
Action under Securitization Act
10 Asset Classification (last half year end)
11 Whether Willful Default/ Fraud declared by HO
12 Detail and value of available securities TOTAL FMV:
TOTAL RV:
13 Book Outstanding*
14 MRA
15 NPV
16 BENCHMARK SETTLEMENT AMOUNT
17 TOTAL RECOVERABLE DUES (CALCULATED
UPTO……………..)
18 NOTIONAL DUES AS PER POLICY
(CALCULATED UPTO……………)
19 a)Present offer of the party
b)ECGC/DICGC/CGTMSE claim amount to be
retained/appropriated in account
c)TOTAL SETTLEMENT AMOUNT(a+b)
20 Notional Concessions
(a)Rebate(13-19)
(b)Waiver(18-19a-20a)
TOTAL NOTIONAL CONCESSIONS(a+b)
*In Technically Written Off accounts, the book o/s would mean the present book o/s as if no technical
write off had been done.

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REG: SETTLEMENT PROPOSAL IN THE ACCOUNT OF M/s …………….…BO……………

21 Provision held in the account

22 ECGC/DICGC/CGTMSE claim
amount to be refunded to the
Corpn.

23 Total effect on Bank’s Revenue

(19c+21-13 - 22)
24 Mode of Payment

25 Source of Payment

26 Earlier OTS, if any, sanctioned

and fate thereof
27 Staff Accountability aspect

28 Status of Connected Accounts

BR.INCHARGE ZONAL MANAGER

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PUNJAB & SIND BANK

FORM No. 709(2012)

APPRAISAL NOTE FOR SETTLEMENT/WRITE-OFF PROPOSALS IN TERMS OF

LAW CIRCULAR No. …… DATED ………..
BRANCH OFFICE:
DATED:
CLASSIFICATION OF A/c:
CASEFALLS UNDER THE POWERS OF:
1. BACKGROUND

A Name of the Account & Group, if

any
B Name of Prop / partners/ directors Net worth as per Present
sanction net worth

C Name of guarantors Net worth as per Present Net worth

sanction

D Dealing with the Bank since

E Activity at the time of sanction
F Present Activity

2. LAST SANCTION/ENHANCEMENT PARTICULARS OF CREDIT FACILITIES

A Nature/Amount/Intt as per last

sanction/ enhancement of
facilities

B Date/Authority of last
sanction/ enhancement
C Name of above authority

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REG: SETTLEMENT PROPOSAL IN THE ACCOUNT OF M/s …………….…BO…….

3. BRIEF HISTORY OF THE CASE

4. PRESENT POSITION OF PARTY'S UNIT & ACCOUNT

A Status of party's activity financed by the Bank: Working / not working
B If not working, date since when it is so:
C If unit is working, profits/losses for the last 3
years

D Date of last visit to the unit/activity

E Asset Classification of the a/c at the end of last Standard/Sub Std./ DF/ Loss
half year
F Whether the a/c is staff connected. If yes, Yes / No
detail thereof & exact connection be given.
G If the a/c is staff guaranteed, detail thereof and
amount of deduction made from his/her salary.
If no deduction made, reasons thereof
H Whether any fraud/wilful default declared by Yes / No
HO. If so, details thereof
I Date of latest security documents and BC slip
on record.
J Since when showing sticky tendencies
K Reasons for account turning NPA

L Measures taken to arrest sticky tendencies:

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Date of declaration of account as NPA

M
-Date/Amount/Intt prayed in suit
N -Stage of suit with next date of
hearing & purpose thereof
-Amt. recovered after filing of suit
-Date/amt./intt awarded in decree
O -Date of RC/filing execution of decree
& its present stage
-Next date of hearing/purpose.
-If execution not filed, reasons there of
-Details of appeal filed, if any, against decree
-Action taken under SARFAESI Act
and its outcome and latest proceedings

Present outstanding in books*

P
Date/amount of Technical
Q Write Off
Total recoverable dues
R in account (calculated upto………….)
Notional dues as per policy (calculated
S upto…………)

* In Technically Written Off accounts, the book o/s would mean the present book o/s as if no
technical write off had been done.

4. DETAILS OF PARTY'S/GUARANTOR'S CONNECTED ACCOUNTS

Name of Connection Book o/s (Intt Detail/ Date & Total

A/c/ BO & with above Charged up to value of Amt recoverable
Facility Account ……...….) available of suit/ dues
security decree

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6. SECURITY ASPECT

DETAILS OF VALUE AS PER SANCTION PRESENT VALUE AS PER VAL.

SECURITIES AS PER REPORT*DATED…………
SANCTION DATED
…………..
FAIR MARKET REALIZABLE FAIR MARKET. REALIZABLE
(INCLUDING
VALUE VALUE(RV) VALUE VALUE
PROPERTIES UNDER
CHARGE AND
NEGATIVE LIEN)
i.PRIMARY

ii. COLLATERAL

iii. SECURITIES UNDER

GENERAL LIEN AND
THOSE, ATTACHED AS N.A. N.A.
PER COURT ORDERS, IF
ANY#

TOTAL

The available securities would mean the securities charged to the Bank by way of
hypothecation/mortgage/charge/lien/negative lien PLUS those under general lien and attached by
order of a Court. However, in case the borrower has been restrained from disposing of any
personal property, by an order of a Court , the same may not be treated as ‘available security’
for the purpose of calculation of NPV but it may be also kept in view while negotiating
settlement in the account in the facts and circumstances of the case.

* In respect of the accounts involving Value of securities upto Rs. 5.00 crore, the valuation
report should be as recent as possible but not more than 1 year old.

However, in respect of accounts where book outstanding and/or Value of Securities is more than
Rs. 5.00 crore, minimum two independent latest Valuation Reports (not more than 6 months
old) from Bank’s approved valuers shall be obtained to assess the proposals with more justice
#ATTACH A COPY OF COURT ORDER

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iv Total value of available securities (as per FMV:

valuation reports) RV:
vi Value of securities reported in the last
investment statement dated ……
vii Reasons for variation in the value of securities
reported under iv, v & vi , if any:

7. DETAILS OF COVERAGE UNDER CGTMSE/DICGC/ECGC

Whether eligible for cover

Whether claim lodged (mention date) if not, reasons thereof
Whether claim received/rejected (mention date and amount)

If claim received, amount to be remitted to CGTMSE/

DICGC/ECGC/Any Other, being their share in the recovery
If rejected, reasons thereof

8. DETAILS OF INSURANCE OF SECURITIES:

In case, there is erosion in the value of securities due to circumstances covered in policy, whether
claim has been lodged with Insurance Company. If not, give reasons thereof:-

9. A) STIPULATIONS OF SANCTION *
NOT ADHERED TO, IF ANY:
B) Observations made by internal/ RBI/ Statutory Comments / Follow up on the
Auditors/Reviewing Authority * observations by branch*

10. Whether any criminal complaint has been Yes / No

filed against the party. If so, furnish complete
details, with its latest status & proceedings.
11. Details of any previous settlements made with
the party and fate thereof.

*In case nothing is reported in Col 9.A) and 9.B), it will be presumed that all stipulations of
sanction have been adhered to and that there are no adverse comments by RBI/Statutory
Auditors/Reviewing Authority.

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12. PRESENT PROPOSAL:

a)Present offer of the party
b)ECGC/DICGC/CGTMSE claim amount to be
retained/appropriated in account
c)TOTAL SETTLEMENT AMOUNT (a+b)
Out of above, down payment
(within 30 days)
Payment schedule for the balance
Source of payment

13.I)CALCULATION OF M.R.A (MINIMUM RECOVERABLE AMOUNT) :

CRITERIA POINT REMARKS (REASONS FOR AWARDING
(+1 OR –1) THE POINT
Unit/activity financed by bank Unit working / not working since:
is working/not working
Realizable value of available Realizable value:
securities* is over/upto 2 times Book o/s**:
the book o/s**
Borrower's/Guarantors' means Good / Not good****
to repay the notional dues are
good/not good****
Notional dues is upto/over 2 Notional dues
times the book o/s** Books o/s**
Age of the account since A/c is NPA since…………….
turning NPA is upto/over 2
years***
Legal position of the bank is
sound/ not sound
Over all points scored
Line of approach to be adopted
as per recovery policy
Minimum recoverable amount
as per the above approach
(calculated upto.....………)
*The available securities would mean the securities charged to the Bank by way of
hypothecation/mortgage/charge/lien/negative lien PLUS those under general lien and attached by
order of a Court. However, properties ‘restrained’ by a Court may not be treated as ‘available
security’ for the purpose of calculation of NPV.
**In Technically Written Off accounts, the book o/s would mean the present book o/s as if no
technical write off had been done.
***The reference date for the purpose of calculation of the age would be the quarter end during
which the a/c was categorized as NPA.
**** Borrower/guarantors mean to repay to be taken negative if unit is not working and OTS amount is
paid through sale of mortgaged assets.
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(II) CALCULATION OF NPV OF REALIZABLE VALUE OF AVAILABLE

SECURITIES

Generally, Realizable Value net of cost of realization discounted appropriately is less than Fair
Market Value of securities in the range of 10-15%. In some rare cases, the realizable value may
be less than Fair Market Value by more than 15%. In such cases the Valuer should give proper
justification for the same with cogent reasons, in the valuation report.

Realisable Value which normally should not be less than 85% of the Market value of the charged
securities for the attendant factors affecting its realisability shall be called Net Present Value of
Securities.

CALULATION OF NET PRESENT VALUE (NPV)

The Net Present Value of the Realizable Value of available securities will be calculated as under:

A. The Realiable Value of the Charged Securities (excluding Plant & Machinery) net of
cost of realization shall be discounted as under:

Sl. No. Nature of Discount/Attendant Factors Rate of Discount Rate of

discount
a) General Discount (Sale through Bank attracts tax burden/sharing of
increase in value of Immovable Property (IP) with lessor etc. and results 15%
in diminutive realizable value)
b) Specific Discount (Over and above point (a) above)
i. IPs having old/multiple tenancy/multiple suits and / or dispute about 20%
validity / enforceability of the mortgage/charge
ii. More than 1 year old stay against SARFAESI Action and/or SARFAESI 10%
action initiated and IPs put on auction but auction failed as no bidder
came forward.
iii. Attachment of IP by Sale Tax / Income Tax / Other Revenue 10%
Authority(If there is no priority charge)
iv. IP not demarcated/Undivided Share mortgaged/no independent Access 10%
v. Mortgagor is dead 10%

The maximum discount under category (a) (General Discount) & category (b) (Specific
Discount) having more than one attendant factors attached to IP shall be restricted to 40%
only.

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SPECIAL TREATMENT FOR NPAs SECURED BY AGRICULTURAL PROPERTY

It has been decided that while considering a settlement proposal in such NPA accounts, the
competent authority may calculate NPV after treating the anticipated period of realization of
agricultural property as beyond three years. Accordingly, the NPV can be calculated @ 60% of
the realizable value of the agricultural property.

REALISABLE VALUE OF ANTICIPATED PERIOD OF NET PRESENT VALUE

REALISATION (NPV)
1.AGRICULTURAL MORE THAN 3 YEARS @ 60% OF (1) :
PROPERTIES :
2.OTHER SECURITIES :
TOTAL NPV

FOR PLANT & MACHINERY:

A. In case of Plant & Machinery, Realizable Value is to be taken into consideration after taking
cognizance of brand name/make of Plant & Machinery/Year of installation/Original cost/
Depreciation/ Current physical conditions/technical changes and obsolescence/ present industry
scenario and future viability etc.

B. Where 2 or more Bids under SARFAESI have failed, the last Reserve Price (fixed in the
last one year) or NPV as above, whichever is lower, shall be accepted as NPV.

C. In Consortium/Multiple Banking Accounts, Bank’s share in Valuation adopted by

Consortium/Joint Lenders shall be accepted as NPV.

(IV)BENCHMARK AMOUNT FOR SETTLEMENT

(i) MRA as per 13 (I) above - Rs.__________

(ii) NPV as per 13 (II)/III above - Rs.__________
(iii) Bench Mark Amount (Higher of (i) (ii)) - Rs.___________

14(A) STATISTICS OF THE PROPOSAL

(a) NOTIONAL DUES calculated as per para 4 of policy

(b ) TOTAL SETTLEMENT AMOUNT (as calculated at 12 above )
(c) Notional Concessions proposed (a-b)*

* Any settlement proposal at an amount more than the notional dues(AS CALCULATED AS
PER PARA 4 OF POLICY) BUT WITHIN THE LAID DOWN NORMS OF POLICY shall fall
under the powers of Branch In-charge(Scale II and above), irrespective of the amount of
notional concessions. However, proposal for such settlement shall be prepared and submitted to
next higher authority for information.

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B) BREAK-UP OF NOTIONAL CONCESSIONS:

a) Amount of rebate, if any, i.e. book o/s** minus total
settlement amount
b) Amount of waiver
c) Notional concessions (a+b)

**In Technically Written Off accounts, the book o/s would mean the present book o/s as if no
technical write off had been done. Please note that in T.W.O. a/cs, rebate is merely a notional
figure and no amount will be debited to the Head “rebate account” in GL.

15 (A) PROVISIONING AND FINANCIAL VIABILITY (NON TWO CASES)

a) Total Settlement amount

b) Plus amount of provision held (as on …………….)
c) Minus book outstanding
d) MinusECGC/DICGC/CGTMSE claim amount to be refunded
to the Corpn.
e) EFFECT ON BANK’S REVENUE(a+b-c-d)

15 (B) PROVISIONING AND FINANCIAL VIABILITY (TWO CASES)

a) Total Settlement amount

b) Minus ECGC/DICGC/CGTMSE claim amt. to be
refunded back to Corpn.
c) EFFECT ON BANK’S REVENUE (a-b)

16. CERTIFICATION BY BRANCH INCHARGE: It is certified that

(a)The account was categorized as Standard/NPA in the audited SLA of last half year.

(b)No fraud/wilful default have been declared in the account by Head Office.

(c)The total settlement amount (Rs………….) is less than/equal to/ more than the BENCH
MARK AMOUNT of Rs. …….. as per policy.

(d)The proposed repayment schedule is within the norms of the policy.

(e)All possible efforts have been made for recovery of dues and the present proposal is in the
best interest of bank.

(f)The securities have been physically verified and the value reported in the proposal is correct.

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(g)That the borrower is not covered under Clause 19 (ii) of the policy w.r.t. restrictions on giving
rebate to Directors etc.

(h)That there is no deviation from the laid down norms OR there are following deviations from
the norms laid down under policy.

17. SANCTION NOTE OF BRANCH INCHARGE WITH PROPER JUSTIFICATION:

(FOR BM POWER CASES)

It is certified that the above compromise/one time settlement proposal in the name of
………………………………………… has been sanctioned by the undersigned within the
delegated powers and the proposal is in total conformity with Bank’s Recovery Management
Policy contained in Law Cir No……. dated ……….

18. SPECIFIC RECOMMENDATIONS OF BRANCH INCHARGE WITH PROPER

JUSTIFICATION:
(FOR CASES BEYOND BM POWER)

DATED........... NAME, DESIGNATION &

SIGNATURES OF BRANCH INCHARGE

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19. ZM IN-CHARGE RECOMMENDATIONS AND CHECKLIST (FOR ZO / HO

POWER CASES)
---------------------------------------------------------------------------------------------------------------------

1. The prescribed proposal form has been completely filled up and all relevant information/
documents have been enclosed.

2. Specific comments on the under noted points:

i) Comments on the present Net worth/ means of the borrower/ partners/ directors to repay
the notional dues:

ii) Comments on the present net worth/means of the guarantor to repay the notional dues:

iii) Comments on the present status of the activity financed by the bank and on its financial
results, if working.

iv) Comments on the status of CGTMSE/DICGC/ECGC/Insurance claim, if eligible and also

the amount to be appropriated out of the claim received, if any.

v) Comments on whether party has been declared as a wilful defaulter HO. If so, the
reference/date and grounds of such declaration.

vi) Comments on whether any fraud has been declared in the account by HO. If yes, brief
particulars of the same, specifying the amount involved in fraud along with date of such
declaration.

vii) Comments on any other outstanding connected accounts of party/ guarantors and their
mode of adjustment.

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viii) Comments on the release of available securities if there are other outstanding connected
accounts of the party/guarantor.

ix) Comments on present fair market value and realizable value of the securities available to
the bank (including any securities under lien/attached by the court).

x) Comments on and reasons for the variation, if any, in:-

a)the value of securities now available(i.e. under hypothecated/mortgaged/charge/negative lien

INCLUDING THOSE UNDER GENERAL LIEN AND THOSE ATTACHED BY A COURT,
if any.)

b)the value of securities at the time of sanction of facilities

c)the value of securities reported in last investment statement.

xi) Comments regarding correctness of the notional dues and effect on revenue calculated by
the branch.

xii) In staff guaranteed cases, comments on deduction made from salary/reasons for non
deduction of installments from the salary of the staff member.

xiii) Any other vital information regarding the case.

xiv) Comments/ Justification for proposed settlement:

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xv) STAFF ACCOUNTABILITY ASPECT: The Zonal Manager to certify as under:

a) No staff member is held accountable in the case. OR

b) Accountability for the lapses in the account has been fixed and erring official(s) Sh.
_______________________has / have been held accountable. The concerned authority
________________ (mention name & designation) has been advised to initiate disciplinary
proceedings against him/them. (A copy of staff accountability report and letter, if any, advising
the concerned authority for initiating action be enclosed) OR

c) On the basis of staff accountability fixation report (copy enclosed), the concerned staff
member(s) Sh...............has/have already been awarded __________________punishment,
OR

d)We have initiated the process of assessing the aspect of staff accountability and complete
report in respect thereof shall be submitted by ______ ( within maximum 30 days).

Staff accountability certificate as per Annexure `B’ is enclosed.

Meanwhile the proposal for settlement in above account may be considered.

DATED....... ZONAL MANAGER

20.SANCTION NOTE AT ZONAL OFFICE LEVEL:

CERTIFICATE BY THE SANCTIONING AUTHORITY:

It is certified that the above compromise/one time settlement proposal in the name of
………………………………………… has been sanctioned by the undersigned within the
delegated powers and the proposal is in total conformity with Bank’s Recovery Management
Policy contained in Law Cir No …… dated ……..

NAME ZONAL OFFICE

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21. SPECIFIC RECOMMENDATIONS OF ZONAL MANAGER:

(FOR CASES UNDER HO POWERS)

DATED ZONAL MANAGER

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“Annexure-D”
PUNJAB & SIND BANK
(A GOVT. OF INDIA UNDERTAKING)

STAFF ACCOUNTABILITY CERTIFICATE

Dated: _______.
REG: Sh./ Smt./ M/s ________________________________________

B.O. ________________________________________

We have completed the staff accountability aspects of the captioned case and certify
that:-

 There is no fraud in the case. (If there is any fraud; involvement of any staff must
be analyzed and if any staff involvement is found, please submit details and
action taken report)

 There is no vigilance angle involved in the case (If there is any vigilance angle
involved, please submit details and action taken report)

 No staff lapses or irregularities found/ staff lapses have contributed to the

account becoming NPA (In the later case submit details and action taken report)

 No staff member is held accountable in the captioned case / the following staff
members have been held accountable in the captioned case and action initiated /
taken is as under: - (please give details)

BRANCH INCHARGE
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CONCURRENCE OF THE ZONAL MANAGER ON THE ABOVE:

ZONAL MANAGER
ZONE…………...

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“Annexure-E”

FORMAT FOR MONTHLY STATEMENT OF WRITE OFF CASES APPROVED BY

BM/ ZM AS PER CHAPTER-II OF LAW CIRCULAR NO. ______DATED________(TO
BE SUBMITTED BY BMs TO ZM; BY ZMs TO HEAD OFFICE L&R DEPTT)

STATEMENT FOR THE MONTH OF………...............

S. B.O. NAME DATE/ AMT. REALISABLE PRESENT PRESENT ECGC/DICGC/C

NO. OF A/C OF VALUE OF MEANS OF BOOK O/S GTMSE CLAIM
FACILITIES AVAILABLE BORROWER/ APPROPRIATED
SECURITIES GUARANTORS / TO BE
APPROPRIATED
(1) (2) (3) (4) (5) (6) (7) (8)

MRA NPV BENCH TOTAL NOTIONAL NOTIONAL TOTAL STAFF

MARK RECOVER DUES CONCESSIONS EFFECT ACCOUNTABIL
AMT. ABLE ON BANK ITY DETAILS
DUES REVENUE
(9) (10) (11) (12) (13) (14) (15) (16)

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SUMMARY:

i/Total no of a/cs
ii/Total o/s in books
iii/ CGTMSE/DICGC/ECGC claim amt to be appropriated
iv/Total notional dues
v/ Total notional concessions
vi/ Total amt of provision
vii/Total effect on revenue

It is certified that the above write off proposals have been sanctioned by the
undersigned within the delegated powers and the proposals are in total
conformity with Bank’s Recovery Management Policy contained in Law Cir
No…… dated……….

NAME OF SANCTIONING AUTHORITY

DATED... BRANCH INCHARGE/ ZONAL MANAGER

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“Annexure-F”

FORMAT FOR MONTHLY STATEMENT OF SETTLEMENT PROPOSALS

APPROVED BY BM/ ZM AS CHAPTER-II OF LAW CIRCULAR
NO.______________DATED______________(TO BE SUBMITTED BY BRANCHES
TO ZM; BY ZMs TO HEAD OFFICE L&R DEPTT)

STATEMENT FOR THE MONTH OF………...............

S. B.O. NAME OF DATE/ AMT. PRESENT PRESENT REALISABLE MRA NPV

NO. A/C OF BOOK MEANS OF VALUE OF
FACILITIES O/S BORROWER/ AVAILABLE
GUARANTORS SECURITIES
(1) (2) (3) (4) (5) (6) (7) (8) (9)

BEN TOTAL NOTIONA SETTLEME DOWN ECGC/DICGC/ NOTIONAL EFFE STA

CHM RECO L DUES NT PAYMEN CGTMSE CONCESSIO CT FF
ARK VERAB AMOUNT T CLAIM TO BE NS ON AC
AMT. LE WITHIN REFUNDED BANK CO
DUES 30 DAYS REVE UNT
NUE ABI
LIT
Y
DET
AIL
S
(10) (11) (12) (13) (14) (15) (16) (17) (18)

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SUMMARY:

i/Total no of a/cs
ii/Total o/s in books
iii/ Total Bench Mark Amount
iv/Total notional dues
v/ Total Settlement amount
vi/ Total Concessions
vii/Total effect on revenue

It is certified that the above compromise/one time settlement proposal have been
sanctioned by the undersigned within the delegated powers and the proposals
are in total conformity with Bank’s Recovery Management Policy contained in
Law Cir No ….dated…….

NAME OF SANCTIONING AUTHORITY

DATED... BRANCH INCHARGE/ZONAL MANAGER

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“Annexure-G”

MONTHLY STATEMENT ALONGWITH INDIVIDUAL PROPOSALS TO BE

SUBMITTED BY BM TO ZONAL MANAGER FOR REVIEW & SCRUTINY, IN
RESPECT OF CASES SANCTIONED AS PER AS PER CHAPTER- I OF
LAW CIR. NO ________ DATED _______________.

STATEMENT FOR THE MONTH OF………...............

NAME OF BRANCH_______________
STATEMENT AS ON______________
(AMT. RS.)
S. NAME PRESENT FAIR NOTIO SETTL NOTIONAL TOTAL
NO. OF BOOK MARKET NAL EMENT CONCESSIONS AMOUNT
ACCO O/S AS VALUE DUES AMT. ALLOWED RECOVER
UNT * ON OF REBAT WAIVER ED UPTO
AVAILAB E THE
LE REPORTIN
SECURITI G DATE
ES

(1) (2) (3) (4) (5) (6) (7) (8) (9)

*TO BE SUBMITTED ACCOUNTWISE STRICTLY

IT IS CERTIFIED THAT THE ROPOSALS IN ABOVE ACCOUNTS HAVE BEEN

SANCTIONED AS PER LAW CIR. NO ________ DATED _______________. THE
STAFF ACCOUNTABILITY CERTIFICATES IN ALL SUCH ACCOUNTS, BEARING
THE CONCURRENCE OF ZONAL MANAGER, HAVE BEEN PLACED ON RECORD.

DATED_______________ BRANCH INCHARGE

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“Annexure-H”

MONTHLY CERTIFICATE TO BE SUBMITTED TO HO L&R DEPTT. BY ZONAL

MANAGER IN RESPECT OF CASES SANCTIONED AS PER LAW CIR.
NO. ________ DATED _____________.

STATEMENT FOR THE MONTH OF………...............

NAME OF ZO_______________
CERTIFICATE AS ON_______________

IT IS CERTIFIED THAT THE ROPOSALS IN ABOVE ACCOUNTS HAVE BEEN

SANCTIONED AS PER LAW CIR. NO ________ DATED _______________. THE
STAFF ACCOUNTABILITY CERTIFICATES IN ALL SUCH ACCOUNTS, BEARING
THE CONCURRENCE OF ZONAL MANAGER, HAVE BEEN PLACED ON RECORD.

(AMT. RS IN LAKHS.)
S. NAME PRESENT FAIR NOTIO SETTL NOTIONAL TOTAL
NO. OF BOOK MARKET NAL EMENT CONCESSIONS AMOUNT
ACCO O/S AS VALUE DUES AMT. ALLOWED RECOVER
UNT * ON OF REBATE WAIVER ED UPTO
AVAILAB THE
LE REPORTI
SECURITI NG DATE
ES
(1) (2) (3) (4) (5) (6) (7) (8) (9)

*TO BE SUBMITTED ACCOUNTWISE STRICTLY

DATED: _________ ZONAL MANAGER

ZONE_______________

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“Annexure-I”

Sr. CHECK BOX FOR SETTLEMENT Yes No

No.
1. Whether the Account is classified as NPA or Not.

2. Whether Staff Accountability aspect has been examined or

not and staff accountability report is on record or not.

3. Whether calculation of NPV, MRA and Notional Dues has

been done as per extant guidelines.
4. Whether Benchmark Amount considered for calculating
settlement amount.
5. Whether Offer of the party is above Benchmark amount.

If Not, then whether proper reason / justification has been

given in the proposal.
6. Whether proposal has been sanctioned under designated
powers as per guidelines.
7. Whether permission from ED has been taken before
settling Staff connected cases / Director’s Relative Cases.
8. Whether Account is a group account

If Yes, Whether Security aspect considered at the time of

settlement.

9. Whether the account is declared Fraud/ Wilful Defaulter.

(If Yes, then necessary information should be incorporated

in the proposal).

10. If the proposal is rejected, whether the same is done as per

delegated powers.

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Sr. CHECK BOX FOR SETTLEMENT Yes No

No.

11. Whether 5 % Upfront Amount has been received along

with application from the borrower.

12. Whether security valuation has been done and following

points are adhered to :

a) In cases where book outstanding and/or Value of

Securities is more than Rs. 5.00 Crores, whether two
valuations not older than 6 months from different valuers
has been taken and are on record.

b) In cases with security valuation below Rs. 5.00 Crores ,

whether one valuation not older than 1 year has been taken
and is on record.
13. Whether there is depletion in security value from the
original sanction.

If depletion is more than 30%, whether comments of

committee (Formed in terms of Law Circulatory Letter no
56 dated 08.05.2013) for depletion of security are on
record.

14. Whether there is any deviation from the laid down norms.

If Yes, Whether the proposal is put before next higher

authority.
15. Whether Certificates for Compromise settlements are in
conformity with bank guidelines.

16. Whether Repayment Schedule is as per extant guidelines.

If there is any deviation it should be mentioned.

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RECOVERY MANAGEMENT POLICY AND GUIDELINES FOR SETTLEMENT /
WRITE-OFF IN BORROWAL ACCOUNTS

Sr. CHECK BOX FOR SETTLEMENT Yes No

No.
17. Whether following documents are attached with the OTS
proposal :

Proforma of settlement proposal completely filled up.

i. Copies of all the sanction letters of credit facilities.

ii. Copy of latest visit report by bank official to party’s
unit/activity.
iii. Copy of party's request letter for settlement.
iv. Copies of financial papers of party's activity for the
last three years, if the unit is working.
v. Copy of the plaint (If Any).
vi. Copy of decree (If Any).
vii. Copy of execution of decree (If Any).
viii. Copy of appeal against decree (If Any).
ix. Copy of attachment/restraint order issued by court
(If Any).
x. Latest valuation reports from Bank’s approved
valuer in respect of all the securities available by
way of charge/attachment/restraint with specific
reference to their fair market values/ realizable
value.

Page 83 of 83