One Time Settlement is a common way to close a stressed crop loan. Here is how OTS applies specifically to seasonal crop finance.
OTS for a crop loan account
In a crop loan OTS, the bank accepts a single reduced payment to close an NPA account, with relief usually coming from waived interest and penalties.
OTS applies to accounts already classified as NPA, so confirm your account status first.
Preparing the proposal
Submit a written proposal with the amount you can pay and the hardship behind it, backed by evidence of crop loss or a price crash. Arrange funds so you can pay within the deadline if approved.
Frequently asked questions
Who decides the crop loan OTS amount?
The bank, based on its policy and any security. You may propose a figure, but the final amount is the bank's decision.
What if I miss the OTS payment deadline?
An approved OTS usually lapses if payment isn't made in full within the stated period, and the original dues can be reinstated.