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    Q5. Adhere To The Norms Laid by Rbi

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    Kushal Mpvs
    RBI has laid down norms for banks to address non-performing loans. The bank has developed an OTS scheme in accordance with RBI guidelines. The scheme covers (i) loan accounts up to Rs. 25,000 that became doubtful or loss assets by 30.9.2005, (ii) all accounts including suits filed and decreed debts, and (iii) accounts across all sectors. Fraud and malfeasance cases are excluded. Settlement amounts will consider the loan age, security, borrower finances, and recovery received. Branches should try to recover maximum amounts. Payment is normally a lump sum within one month, but installments of 10% downpayment and one year for the balance may be considered.

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    Q5. Adhere To The Norms Laid by Rbi

    Uploaded by

    Kushal Mpvs
    22 views1 page
    RBI has laid down norms for banks to address non-performing loans. The bank has developed an OTS scheme in accordance with RBI guidelines. The scheme covers (i) loan accounts up to Rs. 25,000 that became doubtful or loss assets by 30.9.2005, (ii) all accounts including suits filed and decreed debts, and (iii) accounts across all sectors. Fraud and malfeasance cases are excluded. Settlement amounts will consider the loan age, security, borrower finances, and recovery received. Branches should try to recover maximum amounts. Payment is normally a lump sum within one month, but installments of 10% downpayment and one year for the balance may be considered.

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    RBI has laid down norms for banks to address non-performing loans. The bank has developed an OTS scheme in accordance with RBI guidelines. The scheme covers (i) loan accounts up to Rs. 25,000 that became doubtful or loss assets by 30.9.2005, (ii) all accounts including suits filed and decreed debts, and (iii) accounts across all sectors. Fraud and malfeasance cases are excluded. Settlement amounts will consider the loan age, security, borrower finances, and recovery received. Branches should try to recover maximum amounts. Payment is normally a lump sum within one month, but installments of 10% downpayment and one year for the balance may be considered.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    22 views1 page

    Q5. Adhere To The Norms Laid by Rbi

    Uploaded by

    Kushal Mpvs
    RBI has laid down norms for banks to address non-performing loans. The bank has developed an OTS scheme in accordance with RBI guidelines. The scheme covers (i) loan accounts up to Rs. 25,000 that became doubtful or loss assets by 30.9.2005, (ii) all accounts including suits filed and decreed debts, and (iii) accounts across all sectors. Fraud and malfeasance cases are excluded. Settlement amounts will consider the loan age, security, borrower finances, and recovery received. Branches should try to recover maximum amounts. Payment is normally a lump sum within one month, but installments of 10% downpayment and one year for the balance may be considered.

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    Q5.

    ADHERE TO THE NORMS LAID BY RBI:

     Accordingly, Bank has framed an OTS Scheme keeping in view of the guidelines
    communicated by RBI. (i) Coverage of accounts: a) All loan accounts with original advance/
    sanctioned limits up to Rs. 25,000/- which became doubtful and loss assets as on 30.9.2005.
    b) All accounts, including Suit filed and Decreed Debts c) Accounts in all sectors irrespective
    of the nature of the business /purpose. d) Cases of fraud, malfeasance are not covered.
    (ii) Settlement formula: The amount that should be recovered as settlement amount under
    these guidelines would be arrived at on the basis of holistic approach taking in to account the
    age of the loan, nature of security available, present financial position of the borrower,
    recovery received so far in the account, final impact on P& L account etc. However branches
    shall make efforts to recover maximum possible in these accounts.
    (iii) Payment: The amount of settlement arrived at as above, should normally be paid in one
    lumpsum immediately i.e, within one month from the date of sanction. However, in deserving
    cases, Branches may consider recovering the settlement amount in installments with a down
    payment of at least 10% to be received at the time of settlement. The balance Syndicate Bank
    amount should be recovered within one year from the date of sanction of OTS along with
    DPI.
    (iv) Scheme Period The Scheme will be in operation up to 31.12.2006.
    (v) Fresh Loans: The borrowers whose loans are closed under this scheme would be eligible
    for fresh loans. The respective authorities to take decision on fresh loan as per the delegated
    powers keeping in view the viability of the proposed activity, income generation to meet the
    loan installments and interest, borrower’s experience in the line etc. Bank’s Rights under the
    provisions of SARFAESI Act: “The Securitisation and Reconstruction of Financial Assets
    and Enforcement of Security interest Act 2002”(54/2002) has been effective from 21.6.2002,
    the date on which the first Ordinance was promulgated and has received the President’s
    assent on 17.12.2002.

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