Rbi Revises One-Time Settlement Plan For Urban Co-Op Banks

The Reserve Bank of India (RBI) has given an extended cut-off date of March 31, 2000, to urban co-operative banks (UCBs) under a new one-time settlement (OTS) scheme for cleaning up their sticky assets. Under the earlier OTS scheme, the cut-off date was March 31, 1998.

Further the outstanding balance in the accounts, which have become doubtful or loss as of March 31, 2000, that can be settled has been doubled to Rs 10 crore under the new OTS.

The central bank has taken this decision in response to representations received from UCBs. The revised OTS scheme for UCBs will also cover non-performing assets (NPAs) classified as sub-standard as on March 31, 2000, which have subsequently become doubtful or loss assets.

After reviewing the earlier scheme, the RBI felt that non-performing assets in all sectors, irrespective of the nature of business/ activity/ purpose of advances, which have become doubtful or loss assets as on March 31, 2000, with outstanding balance of Rs 10 crore and below on the cut-off date may be covered under a new OTS.

The RBI said that the draft guidelines could be modified by the respective state co-operative departments so as to be in tune with the legal position obtaining as per the provisions of the Co-operative Societies Act/ Rules.

It may be pertinent to note that unlike UCBs, the state co-operative banks (StCBs) and district central co-operative banks (DCCBs) have not been able to get the benefit of the OTS scheme so far. The regulator for StCBs and DCCBs, the National Bank for Agriculture and Rural Development (Nabard), is wary of coming out with such a scheme as majority of them are loss-making.