March 14, 2017

State Bank of India (SBI), the country’s largest lender, on Tuesday, announced one-time settlement (OTS ) scheme worth Rs 6,000 crore for tractor loans. In a tweet, the bank said, “Special SBI OTS for tractor and farm mechanization loans 2016-17. Avail of benefits until March 31.” According to CNBC TV18, SBI said, “We are willing to take a haircut of 40 percent on outstanding tractor loans as of September 30, 2016.” It further said that “agriculture lending portfolio in Uttar Pradesh should not be less than Rs 10,000 crore to Rs 12,000 crore”.

This is not the first time India’s largest bank has given chance to its customers to repay loan via OTS route. Last year during the same time, the bank had announced OTS on student loan dues in Kerala. In August, the government had said that the public sector banks (PSB) have settled loans worth Rs 3,445 crore through one-time settlement (OTS) mechanism in the current fiscal till June. The Reserve Bank of India (RBI) has provided the framework under which banks can have their own board approved policy for OTS or compromise settlements.

Meanwhile, Prime Minister Narendra Modi promised a loan waiver scheme in Uttar Pradesh for farmers if the BJP is voted to power in the ongoing assembly elections in the state. Addressing a poll rally at Hardoi in Uttar Pradesh, Modi said, “I will make sure that the first cabinet decision after forming (BJP) government in Lucknow will be to waive loans given to farmers in Uttar Pradesh.” “Only 14 per cent farmers in Uttar Pradesh received the benefits of crop insurance. 98 per cent money is given by the Centre, Akhilesh does not consider this as work,” Modi said hitting out at UP CM Akhilesh Yadav’s election slogan, ‘Kaam Bolta Hai’.

[The Financial Express]