OTS FORMULA - AGRI LOANS WITH AGGREGATE

SANCTIONED LIMITS UPTO Rs.25 LACS.

&
FRESH NEED BASED FINANCE TO BORROWERS BELONGING TO
WEAKER SECTION WHO HAVE SETTLED THEIR LOANS AS PER
FORMULA.

REITERATION OF GUIDELINES

Cir. IC/481/2023 Dated 08.06.2023 of RLFP Wing, HO, Bengaluru.

Bank has introduced a separate OTS Formula for

Compromise in respect of Agricultural Loans with
aggregate sanctioned limits upto Rs.25 Lakhs. (Loan
Recovery Policy Cir 223/2023 dated 24.03.2023).

The gist of the guidelines is reiterated as under:

I) Coverage:

- Under agriculture loans and advances +

- NPA accounts which are more than 12 months
old from the date of NPA +
- Limits/Combined limits sanctioned upto Rs 25.00
Lakhs.

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II) Settlement Formula :

Loan sanctioned upto Rs.5.00 Lakhs:

Original Loan amount disbursed Less Recoveries made

in the account (including relief under ADW & DR
scheme)

Loan sanctioned above Rs.5.00 Lakhs to Rs.25.00

Lakhs:

DF1: Original loan amount disbursed plus Simple ROI

@ 6% p.a from date of disbursement till previous
quarter & Other expenses Less Recoveries made in the
account (including relief under ADW & DR scheme).

DF2: Original loan amount disbursed plus Simple ROI

@ 4% p.a from date of disbursement till previous
quarter & Other expenses Less Recoveries made in the
account (including relief under ADW & DR scheme).

DF3: Original loan amount disbursed plus Simple ROI

@ 3% p.a from date of disbursement till previous
quarter & Other expenses Less Recoveries made in the
account (including relief under ADW & DR scheme).

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DF4 & Loss: Original Loan amount disbursed Less
Recoveries made in the account (including relief under
ADW & DR scheme).

Note:

The value of Agriculture Land need not be

considered for arriving at settlement in respect of
settlement.

SACRIFICE :

Sacrifice means write off + waiver of unapplied interest

depending on the asset classification.

III) Sanctioning authority:

a) Branch Heads of Small and Medium Branches

are empowered to settle the loans with aggregate
sanctioned limit up to Rs 3 lacs as per the guidelines
outlined.

b) Branch Heads of Large Branches are

empowered to settle the loans with aggregate
sanctioned limit up to Rs 5 lacs as per the guidelines
outlined.

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c) VLBs / ELBs and other specialized branches
are empowered to settle the loans with aggregate
sanctioned limit up to Rs 10 lacs as per the guidelines
outlined.

d) RO Head CAC is empowered to settle loans

aggregate sanctioned limits above Rs 10 lacs and
upto Rs 25 lacs.

e) Branches / ROs to note that irrespective of

sacrifice amount, they are empowered to settle the
accounts as per (a), (b), (c) & (d) above.

f) Delegation of powers as mentioned in Chapter

29 of HO Circular IC/223/2023 is not applicable for
loans settled under above formula by above
sanctioning authorities.

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IV) Other Terms and Conditions:

a) The scheme will not cover:

- Gold Loans,
- ALVSLs,
- Tractor loans and
- Agriculture accounts which are secured by
immovable / movable security (like House/ Flat /
residential site, tractors, tillers, etc), which are
eligible under SARFAESI ACT & securities like
deposits, Insurance Policies, KVPs, NSCs, etc.
However, such accounts may be settled as per
normal Loan Recovery Policy.

b) Proposals in respect of accounts involving fraud

and /or Wilful Defaulters can be examined / considered
and sanctioning Authority shall be Management
Committee of the Board only.

c) Progress made under the Scheme may be

reported as per Appendix XIV & XV of the Circular
IC/223/2023.

***

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 GRANTING FRESH NEED BASED FINANCE BY
WAY OF KCCS TO BORROWERS BELONGING TO
WEAKER SECTION WHO HAVE SETTLED THEIR
LOANS UNDER ABOVE FORMULA

Nature of Finance:

Only by way of Kisan Credit Card Scheme (KCCS).

Eligibility:

1. Fresh KCCS facility as per scale of finance can

be considered to non-willful defaulters who have
settled their NPA liability under the above formula
subject to such fresh finance not exceeding the
original sanctioned amount of OTS settled
accounts.
2. This finance may be considered by respective
sanctioning authority to the borrowers,
undertaking agricultural activities, those
belonging to weaker section for undertaking
gainful activities.
3. Borrower should have settled and fully paid
the earlier agriculture loans as per above
formula.
4. Need based fresh loans can be extended after 7
days from the date of clearance of dues under
the OTS schemes.
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Eligible Quantum of Loan:

Fresh finance may be granted to the extent of

- the original sanctioned amount of OTS settled

accounts
or
- Scale of finance whichever is less.

(CBS fast path CIX14 to be used for enabling

Customer ID for granting the same).

All other terms and conditions applicable to scheme of

lending (KCCS) to be followed as per Agriculture
Lending Policy issued by PC wing, Head Office, subject
to change from time to time.

***