Punjab to introduce OTS scheme for farmers
In a relief to farmers, the Punjab government has decided to introduce One Time Settlement (OTS) scheme to provide them an opportunity to liquidate their overdues.chandigarh Updated: Jan 11, 2015 17:05 IST
In a relief to farmers, the Punjab government has decided to introduce One Time Settlement (OTS) scheme to provide them an opportunity to liquidate their overdues.
OTS is aimed to provide relief to those farmers who have been declared defaulters of Primary Cooperative Agricultural Development Banks (PADBs) by providing them an opportunity to clear dues and facilitate banks in recycling of funds realised from non-performing assets, an official spokesperson said here on Friday.
This scheme would also help banks in reducing overhead expenses of recovery of overdue amount. This pro-farmer scheme will be applicable for all loans advanced by PADBs in the state which have become overdue as on or before June 30, 2014.
The spokesperson further said that the scheme would also cover cases where suites have been filed and also the cases where decrees have been obtained.
After the settlement is reached, PADBs may takeappropriate steps for closure of such cases in respective courts. However, the scheme would not cover cases of fraud and wilful defaulters.
In case a borrower does not honour the settlement, it would be treated as null and void and in such cases banks would be at liberty to recover the amount as if no settlement has been made.
This settlement amount would be calculated by charging simple interest at 9 per cent per annum on the default principal amount due, provided the total interest charged should not exceed the principal loan amount.
However, there would be no concession regarding payment of principal amount. "Likewise, no additional recovery would be made from such borrowers who have already paid double the principal amount or more than double the principal amount.
As per the scheme, 25 per cent of the settlement amount should be paid on the date of settlement and the balance of 75 per cent would be payable within a maximum period of one year in two instalments from the date of settlement.
In case the balance amount is paid within 30 days of settlement, then no interest for a period of up to 30 days would be charged on the amount paid within 30 days from the date of settlement.
However, in case the balance 75 per cent amount is not paid within the stipulated period, the settlement would stand cancelled and all legal proceedings initiated for recovery of loan would stand restored.
The borrower settling the dues under the scheme would be eligible for fresh loan only after the settled amount was fully paid, he added.