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Banks recover Rs 61,000 crore through one-time loan settlement

In almost four fiscal years, eleven banks have recovered about Rs 61,000 crores through one-time settlements, the government informed Parliament on Monday.

The data include the previous three fiscal years and extend through December 2021 of the current fiscal year.

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According to Reserve Bank instructions, banks must have a board-approved loan recovery policy, which may cover negotiated settlements through compromise, including one-time settlement (OTS), under which recovery in non-performing assets (NPA) loan accounts is to be effected to the greatest extent possible at the lowest possible cost, said Minister of State for Finance Bhagwat Karad in a written reply to the Lok Sabha.

He stated that such steps were aimed to assist banks in quickly recycling their cash with benefits.

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All nationalised banks have a loan recovery policy that has been authorised by the board of directors. OTS was granted in 38,23,432 cases during the previous three fiscal years, according to information from the 11 nationalised banks.

These 11 banks are, Punjab National Bank recorded the highest number of OTS at 8.87 lakh, followed by Bank of India 4.97 lakh; Bank of Baroda 4.34 lakh; Indian Bank 4.27 lakh; Canara Bank 4.18 lakh; and Central Bank of India 4.02 lakh.

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The others are Union Bank of India 2.99 lakh; UCO Bank 2.38 lakh; Indian Overseas Bank 1.33 lakh; Bank of Maharashtra 63,202 and Punjab & Sind Bank 20,607.

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