Monday, 23 October, 2017
Update

EDC comes out with OTS to recover old loans

Offers concessions to borrowers to motivate them to pay back 15 to 20 year old debts

Story: the goan | network | 12th October 2017, 12:39 Hrs
PANAJI
EDC has come out with a special one-time settlement (OTS) scheme to recover some of its non-performing assets (NPAs), which are on account of term loans given more than 15 years ago. The OTS scheme offers few concessions to the borrowers in order to motivate them to pay back the loan to EDC.
S V Vernekar, managing director, said, "There are 174 cases, which were written off in our books as NPAs. Some of these cases date back to the time of inception of EDC. One way to recover the due amount is to start legal proceedings against these borrowers. But, in many cases, the borrower has expired. Most of these loans were given against the security of machinery, which has become obsolete today. Therefore, to avoid spending time in recovering money through legal route, we have come out with this scheme."
Vernekar further confirmed that Rs 4.2 crore principal is due to EDC on account of these 174 cases. EDC has divided the pending cases into three categories. The first category is of term loans of upto Rs 15 lakh, which were disbursed more than 15 years ago and upto 20 years, which means from April 1, 1997 to March 31, 2002.
For this category, the borrower will have to pay the original principal amount less the amount received from the borrower from all sources towards principal, interest, sale proceeds and OTS down payment.
Vernekar explained, "We are not asking borrowers to repay the total loan amount they owe to EDC. The total amount includes principal as well as interest due. We are asking them to repay only the principal, which will also be reduced to the extent of all payments made by borrowers to us in the past. The idea is to encourage them to pay."
The second category is of term loans of upto Rs 15 lakh, which were disbursed more than 20 years ago and upto 25 years, which means from April 1, 1992 to March 31, 1997. In this category, the borrower will have to pay 75% of the original principal amount less the amount received from the borrower from all sources towards principal, interest, sale proceeds and OTS down payment. The borrower saves 25% of even the principal, if he decides to go for the OTS scheme in this case.
The third category is of term loans of upto Rs 15 lakhs, which were disbursed more than 25 years ago. In this category, the borrower will have to pay 50% of the original principal amount less the amount received from the borrower from all sources towards principal, interest, sale proceeds and OTS down payment. The borrower saves 50% of even the principal, if he decides to go for the OTS scheme in this case.
The OTS scheme pertains only to term loans and not to loans given under Chief Minister Rojgar Yojana (CMRY).

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