Lok Sabha Question No. 286 (STARRED), answered on 2016-08-05
Subject: Settlement of Loan
Ministry: FINANCE
Asked by: VIJAYSINH MOHITE PATIL, HEENA VIJAYKUMAR GAVIT

GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF FINANCIAL SERVICES LOK SABHA STARRED QUESTION NO.*286 TO BE ANSWERED ON THE 5 th  AUGUST, 2016/ SHRAVANA 14, 1938 (SAKA)

SETTLEMENT OF LOAN

*286: SHRI MOHITE PATIL VIJAYSINH SHANKARRAO, DR. HEENA VIJAYKUMAR GAVIT

Will the Minister of FINANCE be pleased to state: (a) whether the public and private sector banks have undertaken One  Time Settlement (OTS)/Compromise Settlements of loans during the last two years and the current financial year and if so, the details thereof; (b) the details of the loans settled during the above said period, bank-wise; (c) whether the settlement of loans was undertaken in a manner as per the directions/norms of the Reserve Bank of India; and

- (d) if so, the details thereof and if not, the reasons therefor?

ANSWER FINANCE MINISTER

(SHRI ARUN JAITLEY)

(a) to (d): A Statement is laid on the Table of the House.

************

## STATEMENT AS REFERRED TO IN REPLY TO PARAs (A) TO (D) OF LOK SABHA STARRED QUESTION  NO.  *286  FOR  ANSWER  ON  5 th   AUGUST,  2016  /  SHRAVANA  14,  1938  (SAKA) REGARDING SETTLEMENT OF LOAN BY SHRI MOHITE PATIL VIJAYSINH SHANKARRAO, DR. HEENA VIJAYKUMAR GAVIT

(a)  to  (b) Yes Sir,  details  of  One  Time  Settlement  (OTS)  /  Compromise  Settlement  done  by  Public Sector Banks during last two years and current year are annexed.

(c) to (d): RBI has provided framework under which banks frame their own board approved policy for One Time Settlements (OTS)/Compromise settlements. RBI has issued instructions which are available on  its  website  which  inter-alia  specify  (i)  that  every  effort  should  be  made  to  recover  dues  to  the maximum extent possible at minimum expense (July 28,1995), (ii) constitution of Settlement Advisory Committees (SAC) for compromise settlements of chronic NPAs in Public Sector Banks for small sector (May  27,1999),  (iii)  revised  guidelines  to  cover  all  NPAs  up  to  Rs  5  crore  relating  to  all  sectors excluding cases of wilful default, fraud and malfeasance and for NPAs above Rs 5 crore, bank boards to  form  policy  guidelines  covering computation formula, realizable amount, cut-off date and payment conditions  and  (iv)  guidelines  for  compromise  settlements  in  small  and  medium  enterprises  (SME) sector for amount up to Rs 10 crore (September 3, 2005).

Banks frame their policy in the above outlined guidance framework. Further, RBI, vide circular dated June 21, 2010, has mandated that every authority / officer sanctioning One Time Settlements should append a certificate stating that it has been done in conformity with RBI guidelines.

**************

## DRAFT REPLY

## (TO BE TYPED IN HALF MARGIN DOUBLE SPACE)

## LOK SABHA

## STARRED QUESTION NO: *286

## TO BE ANSWERED ON THE 5 th  AUGUST, 2016/ SHRAVANA 14, 1938 (SAKA)

## SETTLEMENT OF LOAN

| QUESTION *286: SHRI MOHITE PATIL VIJAYSINH SHANKARRAO, DR. HEENA VIJAYKUMAR GAVIT:   | QUESTION *286: SHRI MOHITE PATIL VIJAYSINH SHANKARRAO, DR. HEENA VIJAYKUMAR GAVIT:                                                                                                                             | ANSWER To be answered by FINANCE MINISTER              |
|--------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|
| (a)                                                                                  | whether the public and private sector banks have undertaken One Time Settlement (OTS)/Compromise Settlements of loans during the last two years and the current financial year and if so, the details thereof; | to (d): A statement is laid on the table of the House. |
| (b)                                                                                  | the details of the loans settled during the above said period, bank-wise;                                                                                                                                      |                                                        |
| (c)                                                                                  | whether the settlement of loans was undertaken in a manner as per the directions/norms of the Reserve Bank of India; and                                                                                       |                                                        |
| (d)                                                                                  | if so, the details thereof and if not, the reasons therefor?                                                                                                                                                   |                                                        |

*******

## F.No.10/90/2016-RECOVERY