PANJIM: Co-operative banks in the State have turned down the offer of a One Time Settlement (OTS), arguing that OTS is not permissible as per their banking guidelines. The banks have now proposed that the State government draft a new scheme on the lines of the present Debt Relief scheme that will fit within the preview of their banking norms. This would involve the government giving a subsidy towards settlement of the loan with the remaining paid by the truck, barge or machinery owner.
They have however agreed to have agreed for a 100 per cent loan interest waiver.
Speaking to HERALD, Chairman of Goa State Co-Operative Bank Ulhas Phaldesai said that the Co-operative banks have agreed to waive off 100 per cent loan interest of mining borrowers as the value of assets is depreciating. “We are left with no other option then waive off entire loan interest,” he said.
Phaldesai further said that the banks can’t go ahead with the OTS scheme, along the lines of what nationalised banks have promised as their guidelines do not allow them to have a compromise settlement. He said that nationalised banks that are governed by RBI guidelines 1995, have the powers to undertake OTS at their own risk but the same power does not lie with co-operative banks.
“We being a small set up and at the State level, we have no powers to go ahead and do these settlements. We need clearance from RBI, which says that our bank guidelines do not permit us to do these compromises,” he said adding ‘we are ready for a debt relief scheme provided it fits within our guidelines’.
This is in contrast to the decision, pending approval from their boards, taken by nationalised banks like SBI, Canara Bank and Syndicate Bank to offer a 40% waiver of the total loan exposure following which the government would give a 35% (approximate) subsidy on the reduced figure.
The decision of the co-operative banks was conveyed to the government during a bankers meeting held on Wednesday. Sources indicate that the Reserve Bank of India (RBI) is also ready to give its green signal to co-operative banks to go ahead with their debt relief proposal provided government draft the new scheme as per their guidelines. RBI permissions are a must for the co-operative banks as they do not have the powers to go in for a compromise settlement. The total loan exposure with the co-operative banks is around Rs 270 crore.
“We have requested government to draft the scheme at the earliest,” the Chairman said.
