A negotiated settlement between a bank and a defaulting borrower where the bank agrees to accept less than the full outstanding dues in final settlement of the loan account. OTS is governed by each bank's RBI-approved OTS policy. Once an OTS is agreed and the settlement amount is paid, the bank must withdraw all civil and criminal proceedings. OTS amounts are typically 60-80% of outstanding dues, but vary based on the asset quality and negotiation.
Need Expert Advice on One-Time Settlement (OTS)?
For specific advice on how One-Time Settlement (OTS) applies to your debt recovery matter, consult Advocate Subodh Bajpai — LLM, MBA (XLRI Jamshedpur). 25+ years of exclusive banking and debt recovery practice across DRT, SARFAESI, IBC, and NI Act.
Defined by Advocate Subodh Bajpai, Senior Partner, Unified Chambers and Associates