Public sector banks have settled loans worth Rs 3,445 crore through one-time settlement mechanism in the current financial year till June, government said today.
Reserve Bank of India (RBI) has provided the framework under which banks can have their own board approved policy for One Time Settlement (OTS) or compromise settlements.
Till June this fiscal, public sector banks settled loans to the tune of Rs 3,445 crore involving 1.44 lakh accounts through OTS, as per data provided by Finance Minister Arun Jaitley to the Lok Sabha.
During this period, State Bank of India settled the maximum amount of Rs 701 crore through OTS mechanism, followed by Indian Bank and Bank of Baroda which settled loans worth Rs 343 crore and Rs 305 crore respectively.
The loan amount settled through OTS stood at Rs 20,776 crore in 2015-16 involving nearly 9.45 lakh accounts. This compares to Rs 20,349 crore spread across 8.05 lakh accounts recorded in 2014-15.
"Every authority/officer sanctioning OTS should append a certificate stating that it has been done in conformity with RBI guidelines," Jaitley said in a written reply.
During Question Hour, Minister of State for Finance Santosh Gangwar said loans are given to small borrowers as per RBI guidelines and these are monitored.
