IDBI Bank Launches OTS scheme for retail NPA borrowers to Boost Recovery

Current Context: IDBI Bank has introduced the Sugam Rinn Bhugtan Yojana (SUGAM), a one-time settlement (OTS) scheme aimed at recovering dues from retail non-performing accounts (NPAs).

• This scheme targets borrowers with principal outstanding between Rs 10 lakh and Rs 10 crore.
• Key details of the scheme include:
• Eligibility: Retail borrowers whose loans turned NPAs by March 31, 2021, and remain NPAs as of August 31, 2024.
• Waivers and Concessions: The scheme offers waivers on interest and expenses, with specific terms for guaranteed emergency credit lines.
• Payment Terms: Borrowers must pay at least 10% of the settlement amount upfront by December 31, 2024. The remaining balance can be paid within 90 days without interest or by March 25, 2025, with interest.
• Exclusions: Accounts under vendor bill discounting, secured by corporate guarantees, or admitted to the National Company Law Tribunal (NCLT) are not eligible.
• This initiative aims to resolve long-pending cases and improve the bank’s recovery from NPAs.

Question:

1 What is the minimum upfront payment required by borrowers under the SUGAM scheme by December 31, 2024?

• A) 25% of the settlement amount
• B) 50% of the outstanding loan
• C) 10% of the settlement amount
• D) 5% of the total loan value

Answer: C) Borrowers must pay at least 10% of the settlement amount upfront by December 31, 2024, under the payment terms of the SUGAM scheme.