SBI approves OTS for mining-affected borrowers in Goa

State Bank of India has approved the one-time settlement (OTS) scheme for its borrowers from the beleaguered mining industry in Goa.

This is expected to pave way for other financial institutions to settle the long-pending bad debt of those who are in a lurch due to the halting of mining in the state.

The scrutiny committee of the state's Economic Development Corporation (EDC) yesterday recommended the Goa government to go ahead with the OTS offered by SBI to its borrowers, a senior EDC official said.

The bank has proposed 30% waiver on principle loan amount to the truck owners and 40% to the barge owners, he said.

The bank has also offered to waive 100% interest on the loans procured by the truck and barge owners from September 30, 2012, when iron ore exports had stopped following the Supreme Court order vis-a-vis illegal mining in the state, he said.

The truck, barge and mining machinery owners reeling under the debt were earlier offered subsidy up to 35% on their loan amount by the Goa government.

The government had asked the banks to provide relief through OTS as assets of these borrowers had turned into NPA.

The loans of 8,000 trucks, barges and machinery owners are feared to turn into bad debt, and the state government has estimated the total loan exposure of the mining dependent people to be about Rs 1,000 crore.

The other lenders like Lokmanya Cooperative Society, Syndicate Bank, Bank of India, IndusInd Bank and Canara Bank have also submitted their OTS, which would be vetted by the scrutiny committee before recommending the government to go ahead with it, the official added.