Onlykashmir.in News Desk
Awami Itihaad Party (AIP) Chief Spokesperson Inam Un Nabi has urged the State Bank of India (SBI), other public sector banks and private lenders to introduce comprehensive One-Time Settlement (OTS) schemes, with provisions for borrowers whose outstanding liabilities exceed ₹5 crore.
Welcoming J&K Bank’s RAHAT Special OTS Scheme, he said the initiative offers a much-needed opportunity to eligible borrowers with dues of up to ₹5 crore. However, he stressed that similar relief must also be available to larger borrowers who remain outside the scheme’s ceiling.
Inam said many established businesses, industrial units, hotels and other commercial ventures are facing financial distress despite having contributed to employment and economic activity. Their difficulties deserve consideration through a structured settlement mechanism, rather than leaving them trapped in mounting liabilities and prolonged recovery proceedings.
“Why should a genuine borrower with an outstanding liability of ₹10 crore, ₹20 crore or even ₹50 crore be denied an opportunity to settle merely because of the size of the account? Financial distress cannot be defined by an arbitrary monetary ceiling. Banks must create mechanisms to consider larger accounts on their individual merits,” he said.
He specifically appealed to SBI, Punjab National Bank, Bank of Baroda, Canara Bank and private sector lenders to introduce dedicated OTS windows with substantially higher settlement limits, including for accounts exceeding ₹50 crore wherever justified.
He emphasised that large borrowers should not automatically be treated as wilful defaulters, pointing out that genuine business failures and deliberate loan defaults are fundamentally different. Settlement decisions, he said, should consider the borrower’s financial circumstances, recovery prospects and the commercial viability of the negotiated settlement.
Prolonged litigation, accumulating interest and declining asset values can ultimately undermine the banks’ own recovery interests, he added. A transparent and time-bound OTS framework would allow banks to recover stressed funds while enabling viable businesses to resolve old liabilities and resume activity.
Inam also urged the Union Finance Ministry and the Reserve Bank of India to encourage banks to adopt more inclusive compromise settlement policies, particularly for larger accounts needing case-specific consideration. “OTS should be seen as a practical financial recovery instrument, not merely a concession to borrowers. J&K Bank has taken a welcome initiative; it is time for SBI and other banks to extend similar opportunities to larger borrowers. Genuine entrepreneurs should have a fair chance to settle their liabilities, protect employment and rebuild their businesses,” he said.
The statement is a political demand and does not give details of the RAHAT scheme beyond its ₹5 crore ceiling. Banks make settlement decisions under their own board-approved policies and regulatory norms, and no bank had responded to the AIP’s appeal in the information available.
