Bhubaneswar : The Cooperation Department has approved a model One Time Settlement (OTS) Scheme to be implemented in Odisha State Cooperative Bank (OSCB), District Central cooperative banks (DCCBs), Urban Cooperative Banks (UCBs) and Primary Agricultural Cooperative Societies (PACS). This is aimed at reducing the NPA burden of the Cooperative Banks and PACS and enhance their asset quality. The long standing demand of Cooperative Banks for an OTS Scheme has been addressed with this step. This is a model scheme and the Banks may implement it by customising according to their financial needs with due approval of the Committees of Management.
The key highlights of the scheme are:
- The OTS Scheme will be implemented in every Financial Yearfrom 1st April to 30th October for a period of 6 months.
- The cut-off date for this OTS Scheme to be implemented in the Financial Year 2025-26 has been fixed at 31.03.2023. All loans extended by the Cooperative Banks, which have become doubtful or loss assets as on the cut-off date will be eligible for OTS.
- The short term crop loans extended by PACS/LAMPCS, fully secured loans, Gold loans, loans under tie-up arrangements and loans availed by wilful defaulters, however will not be covered under the scheme.
- A screening committee will be constituted by each Bank to check the eligibility of the borrowers.
- Individual officers of the bank will be delegated with financial powers to approve the eligible proposals subject to review by the next higher authority.
- Loans with book liability up to Rs 25 lakhs can be covered under the scheme. For PACS, this limit has been fixed at Rs 3 lakhs.
- The assets have been categorised as per their size and quality, and accordingly the compromise formula have been suggested.
- Loans covered under any legal action can also be considered for settlement under the scheme.
- However, no borrower can claim OTS as a matter of right. It will be up to the Bank to accept or reject any OTS proposal of any borrower.
- A person availing OTS from any institution shall not be eligible for further loan up to a minimum period of 3 years after final settlement of his/her previous loan under OTS.
- Mechanism for redressal of grievance has also been suggested under the scheme and the scheme has also been kept open for review in case of any constructive suggestion by any Bank for further refinement of the scheme.
With this initiative, the Department aims to weed out bad, non-performing assets/loans of the Cooperative Banks which have piled up due to non-availability of any OTS scheme since long. This will certain provide a window to the Cooperative banks to cleanse their balance sheets and improve asset quality.
