SL-OTS-G Scheme, for the borrowers financed under Government Sponsored Schemes, has been formulated in consultation with the SLBC for Gujarat State on the lines of RBI Guidelines.

1. Coverage
a. All loan accounts where the principal amount is equal to or less than Rs.25,000/- and which have become doubtful & loss as on 30th September 2005 financed under Government Sponsored Schemes. b. Cases of willful default, fraud and malfeasance will not be covered under the scheme.

2. Eligible amount:
The Ledger Balance as on date of NPA shall be considered as eligible amount for settlement, where subsidy/margin money is already adjusted prior to NPA date. In case subsidy/margin money is not adjusted to loan account on or before the date of NPA, the eligible amount shall be the Ledger Balance after adjustment of such subsidy/margin money received by the Bank.

3. Settlement Formula:
a. Accounts where tangible security is available and realisable value of the security is equal or more than the eligible amount: Minimum amount that should be recovered under the OTS in respect of compromise settlement shall be 100% of the eligible amount

b. Accounts where tangible security is available and realisable value of the security is less than the eligible amount: Minimum amount that should be recovered under the OTS in respect of compromise settlement shall be 75% of the eligible amount or realisable value of the security, which ever is higher.

c. Accounts where security is either not obtained or not available: Minimum amount that should be recovered under the OTS in respect of compromise settlement shall be 75% of the eligible amount.

d. Value of the security shall be assessed by the concernd Branch.

e. In case of eligible suit filed accounts, legal expenses are to be waived.

f. The amount already repaid by the borrower after the date of NPA in the eligible accounts is to be considered as amount recovered from the eligible amount for working out the amount of settlement.

4. Payment :
The amount of settlement arrived at in the above manner, should preferably be paid in one lump sum. In cases where the borrowers are unable to pay the entire amount in one lump sum, at least 25% of the amount of settlement should be paid upfront and the balance amount of 75% should be recovered in instalments within a period of six months together with interest at simple rate of 10% per annum from the date of settlement up to the date of final payment.

5. Sanctioning Authority :
The decision on the compromise settlement and consequent sanction of waiver or sacrifice in ledger balance or write-off are delegated to Branch Manager for quick disposal of cases. However, the Branch Manager who has sanctioned the loan cannot approve the compromise settlement. In such cases, the necessary approval to be obtained from the next higher authority.

6. Non-discretionary treatment:
The branches should follow the above guidelines for One Time Settlement of all NPAs covered under Govt. Sponsored schemes, without discrimination and a monthly report on the progress be submitted to the controllers in format-I attached. In turn, the zonal office should submit the consolidated position, for the zone as a whole, to Asset Recovery Department at Head Office with a copy to the Lead Bank at Head Office. District Level Consultative Committee shall also review the progress under OTS at quarterly interval. The LDM shall submit Bank-wise District wise information to Convener Bank - SLBC Gujarat (Dena Bank ) on quarterly basis..

7. Validity Period of the Scheme:
The Banks Branches should go for wide publicity of the scheme and also give notice by 30th April, 2006 to the eligible defaulting borrowers to avail of the opportunity for one time settlement of their outstanding dues..

All eligible borrowers should submit their applications to the Bank Branch and at-least first instalment of 25 % of the settlement amount should be repaid on or before 30th September 2006.

Balance part of the settlement amount should be recovered on or before 31st March 2007.

8. Eligibility for fresh loans:
The borrowers who have repaid full settlement amount as per the terms of the settlement are eligible for fresh loans.