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One of the means of debt recovery is through negotiating one time settlement. If any enterprise is not in a position to meet their commitments towards the banks or financial institutions even after undertaking rehabilitation or restructuring of the account, then it can negotiate for a one-time settlement with them as per the bank or financial institution norms under the broad guidelines of Reserve Bank of India. Each bank / financial institution has its own board approved OTS norms. The success of the settlement depends upon the capacity of the borrower to raise required funds in order to fulfill his settlement terms and conditions for which the following parameters are very essential.

  1. Whether the borrower is capable of raising the funds, if so, the means of raising the funds should be identified and the cash flow should be ascertained.

  2. Whether the time stipulated is sufficient to raise the funds.

  3. Whether the borrower is capable of paying interest in case a condition of payment of interest is stipulated.

  4. The realizable value of the security offered towards the loan will play an important role to determine the settlement amount.

  5. If the borrower is declared as a willful defaulter, he is not entitled to any remedy under the recovery laws.

We prepare settlement proposal with implementable terms and conditions without affecting the legitimate interest of our clients and also the bank / financial institution for the sake of mutual benefit of both, bearing in mind the realizable value of the securities on which the bank / financial institution has created their security interest and charge.

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