By MADHU AGRAWAL
State Bank of India (SBI) long back in the year 2012 had launched One-Time-Settlement (OTS) scheme for distressed SBI loans with Micro, Small and Medium Enterprises (MSMEs) whereby loans of upto rupees 10 crores lying dead as Non-Performing-Assets (NPAs) could be settled by paying 25-percent of original loan-amount (without interest and other charges) in six months of settlement without interest. Extra 15-percent discount on settlement-amount was offered on payment of settlement-amount within one month of settlement.
With many MSMEs and traders facing financial crunch as after-effects of demonetisation, introduction of GST and other such factors resulting in economic slow-down, such an uniform One-Time-Settlement scheme for all public-sector banks for loans having been converted into Non-Performing-Assets (NPAs) as on 31.12.2019 has become necessity now with further worsening of trade-situation after lockdown and still on-going corona-pandemic.
Department of Financial Services (Banking) and Reserve Bank of India (RBI) should devise some similar OTS scheme for all banks (private and public-sector) and Non-Banking-Financial-Companies (NBFCs) to mentally relieve traders and others in crisis. However those availing any such scheme may be barred from taking any loans from banks and NBFCs in future. Such scheme will be beneficial for banks and NBFCs also because it has become extremely tough now to recover loans and Equated-Monthly-Instalments (EMIs) from defaulters. At least such OTS scheme must be implemented for all public-sector-banks if not for NBFCs and private banks.
Funding to NBFCs by public-sector banks not agreeing for such suggested One-Time-Settlement (OTS) scheme may be stopped. Scheme should also be applicable in respect of defaulters of dues in respect of credit-cards.
