Twenty-seven public sector banks (PSBs) have recovered around 25-30 per cent of non-performing assets (NPAs) under the one-time settlement (OTS) scheme, which closed on June 30. The number of sticky assets falling in this category -- up to Rs 5 crore -- is 52,00,000 involving Rs 18,500 crore.
According to banking sources, the scheme -- which was applicable to the NPAs as on March 31,1997 -- saw 6,42,000 cases come up for settlement for an aggregate amount of Rs 3,476 crore as on March 31, 2001.
Indian Bank and Uco Bank, which have been labelled as weak banks, have done considerably well under the OTS by effecting recoveries amounting to Rs 495 crore and Rs 219 crore, respectively, as on March 31, 2001. The third weak bank, United Bank of India, has managed to recover Rs 63 crore.
Of the Rs 3,476 crore worth of settlements effected till March 31, 2001, cash settlements have been to the tune of Rs 1,746 crore. And the balance was by way of the defaulter paying the bank 25 per cent of the contested amount and the balance 75 per cent to be paid off in the next one year.
The sources said between April and June, 1,85,000 proposals worth Rs 911 crore came up for processing and around Rs 500 crore worth of NPA proposals are awaiting decisions on compromise settlement.
As on March 31, 2001, State Bank of India recovered Rs 718 crore, Bank of India (Rs 310 crore), Bank of Baroda (Rs 198 crore), Central Bank of India (Rs 157 crore), Punjab National Bank (Rs 152 crore), Union Bank of India (Rs 151 crore), Allahabad Bank (Rs 92 crore), Indian Overseas Bank (Rs 89 crore), State Bank of Patiala (Rs 82 crore), Canara Bank (Rs 79 crore), Bank of Maharashtra (Rs 72 crore), Syndicate Bank (Rs 70 crore), Punjab & Sind Bank (Rs 69 crore), Andhra bank (Rs 63 crore), State Bank of Hyderabad (Rs 58 crore).
The Reserve Bank of India (RBI) issued modified guidelines on July 27, 2000, to the PSBs for recovering NPAs. The guidelines -- which provided a simplified, non-discretionary and non-discriminatory mechanism for making recoveries -- were operative till March 31, 2001. They helped in covering NPAs in all sectors up to Rs 5 crore but did not cover cases of willful default, fraud and malfeasance.
Also, the NPAs -- which, as on March 31, 1997, are categorised as doubtful or loss assets and sub-standard assets which had become doubtful subsequently -- were also covered.
Feedback received by the RBI indicates that the banks were likely to receive a large number of applications during the last week of March 2001. To ensure maximum recovery under the OTS, the central bank has advised that the banks should take decision on all the applications received upto March 31, 2001, by June 30, 2001.
