Personal BankingLoansOTS scheme for Micro & Small Enterprises (MSE)

Salient features of Policy for Non-discretionary One Time Settlement scheme for Micro & Small Enterprises (MSE) Sector.


Micro & Small Enterprises (MSE) sector constitute a growth engine of the economy with significant contribution to GDP , exports and employment opportunities. Besides providing depth to industrial base of the economy, the MSEs also lead to entrepreneurial development and diversification of industrial sector. With the services sector dominating the MSE, and MNCs outsourcing their various requirements to Indian service providers, the scope for MSE finance has increased even further. As per the Priority Sector guidelines issued by RBI, only Micro & Small Enterprises segment will qualify for inclusion under priority sector.


As per RBI stipulations, the following items come under the purview of MSE sector.

Enterprises Units engaged inmanufacturing/processing of Goods Units engaged in providing/rendering of Services
Micro Enterprise
Investment in plant and machinery not exceeding
Rs.25 lacs.
Investment in equipment not exceeding Rs.10 lacs.
Small  Enterprise
Investment in plant and
machinery exceeding Rs.25 lacs
but not exceeding Rs.5 Crores.
Investment in equipment  exceeding Rs.10 lacs nut not exceeding Rs.2 Crores

As per directions of RBI, Bank has put in place a policy for Non-discretionary One Time Settlement scheme for recovery of Non performing loans in MSE sector.

Quantum of OTS:

In the case of loans granted to Micro & Small Enterprises (MSE) , the functionaries are permitted to allow settlement even if there is no yield or even with write off of a portion principal amount subject to their sanctioning powers. NPA accounts in MSE sector can be got closed by OTS wherein bank allows the borrower certain concessions in principal/interest or both, provided the account is closed within a specified period.

In cases of advances, which are fully secured either by primary or collateral securities, the settlement will be allowed, taking into consideration the reasonable value of security available.

The level of sacrifice to be allowed in an account shall be considered after taking into account
history of the account, the nature of default (willful or otherwise), value of securities available,
resourses of the borrower etc and shall be considered on a case to case basis

All settlement proposals should be submitted to the branch concerned .