India's largest bank State Bank of India or SBI has announced a one-time settlement scheme for tractor and farm mechanisation loans, which are in the "doubtful or loss assets" category on September 30, 2016. The scheme will remain valid till March 31. Loans worth Rs 6,000 crore would be eligible for the one-time scheme, said Rajnish Kumar, managing director at SBI.
The bank is willing to write off 40 per cent of the outstanding principal amount of the loan under the scheme, he said, adding that the decision would be taken at the branch level.
SBI comes with one-time settlement in different categories to improve loan recovery, Mr Kumar added.
Mr Kumar also clarified that these tractor loans are not related to demonetisation. "These accounts were already in the non-performing assets (NPA) category as on September 30," he added.
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