How is OTS calculated?

NPV will be calculated with 3 years realization period at prevailing Base Rate + 4\%….One Time Settlement Schemes (OTS)

Age of NPA	Settlement amount formula
01.04.07 to 31.03.09	65\% amount in default	70\% amount in default
On or before 31.03.07	60\% amount in default	65\% amount in default

What is OTS amount?

The One-time Settlement (OTS) tool is used by lenders to recover dues from individuals with a default payment history. The lender agrees for a one-time settlement amount which will be lower than the total amount due. As a borrower, you need to repay the agreed amount at once within the time you are given to do so.

What is the procedure for one time settlement?

OTS is a scheme where the borrower (the one who has defaulted) proposes to settle all the dues at once, and banks agree to accept an amount lesser than what was originally due. The banks settle the loan and waiver/write it off against a one-time instalment, thereby compromising on a portion of their profits.

What is OTS scheme of bank?

OTS Scheme is a one-time settlement scheme that has been very significant during the pandemic. Through this scheme, if one loan borrower fails to repay the loan to the bank, can get a 25-85\% rebate on the same.

How do you write a one time settlement letter?

1) 2) I intend to settle the account under One Time Settlement Scheme. Therefore if you could offer some interest concession, I shall arrange to repay the dues on or before ________________. am agreeable to pay Rs. _____________ as one time settlement of dues.

What is compromise amount?

Compromise amount : Realisable value of primary & collateral securities charged to the Bank; Marketability of securities; Net worth of the Borrowers and guarantors; Pre NPA age of the account; Age in NPA category.

What is compromise settlement?

Compromise settlement refers to a negotiated settlement where a borrower offers to pay and the Bank agrees to accept in full and final settlement of its dues an amount less than the total amount due to the Bank under the relative loan contract.

Does settlement affect cibil?

When a loan is termed settled, it is viewed as a negative credit behaviour and the borrower’s credit score drops by 75-100 points. The CIBIL holds this record for over 7 years. And if the borrower has the settlement in his credit report, the banks and lenders will reject the loan.