By B S Makar, Advocate
Founder – B S Makar Advocates and Solicitors
📍 House No. 669, Sector 64, Mohali, Punjab – 160062
📞 *+91-9878131111* | 🌐 www.makarlaws.com
🔖 Expert in Banking Disputes | SARFAESI Law | Loan Settlements | NPA & DRT Matters

OTS Explained: A Lifeline for Stressed Borrowers

Struggling with loan repayments? Facing bank recovery notices? One-Time Settlement (OTS) could be your way out!

OTS is a bank-approved scheme that allows distressed borrowers to settle their dues for less than the full amount—helping both parties avoid lengthy litigation. At B S Makar Advocates, we’ve helped hundreds of borrowers, including NRIs and SMEs, successfully negotiate OTS deals with banks and NBFCs.

OTS in Simple Terms

✔ Borrower & bank agree on a reduced payoff amount
✔ Account is closed after payment
✔ Avoids DRT/SARFAESI proceedings
✔ Helps clean credit history (partially)

Why Banks Offer OTS Schemes

Banks prefer OTS because it:
✅ Recovers blocked funds faster than court cases
✅ Reduces NPAs and improves balance sheets
✅ Saves litigation costs (DRT/SARFAESI cases can take years)
✅ Meets RBI targets for bad loan resolution

Did You Know? Public sector banks often announce special OTS schemes for farmers, MSMEs, and home loan borrowers during financial year-ends to boost recoveries.

When Should You Consider OTS?

🚨 Your loan is tagged as NPA (90+ days overdue)
🚨 Bank has issued SARFAESI notice
🚨 You face genuine financial hardship
🚨 Legal recovery proceedings have started

Pro Tip: The best time to apply is before the bank files a DRT case—early negotiations get better discounts!

Step-by-Step OTS Process

1️⃣ Submit Written Request

• Formal application with proposed settlement amount
• Attach financial proofs (ITRs, bank statements)

2️⃣ Bank’s Evaluation

• Verifies borrower’s repayment capacity
• May counter-offer with higher amount

3️⃣ Legal Negotiation

• We help clients secure maximum waivers (interest/penalties)
• Ensure no hidden clauses in agreement

4️⃣ Final Approval

• Requires sign-off from zonal/head office
• Get everything in writing before paying

5️⃣ Payment & Closure

• Pay lump-sum or installments as agreed
• Obtain No Dues Certificate
• For property loans: Ensure mortgage release & CERSAI update

Critical OTS Do’s & Don’ts

✅ DO

• Hire a lawyer to review terms
• Get all approvals in writing
• Check impact on CIBIL score
• Ensure property papers are returned (for secured loans)

❌ DON’T

• Miss payment deadlines (OTS gets cancelled)
• Accept verbal promises
• Ignore tax implications (waived amount may be taxable)

How We Help Borrowers

Our banking dispute team provides:
🔹 OTS Strategy & Documentation
🔹 Hard-Nosed Negotiation with banks
🔹 DRT/SARFAESI Representation if talks fail
🔹 NRI Special Assistance for overseas borrowers
🔹 Post-OTS Credit Repair guidance

Success Story: Recently secured 65% waiver for a Punjab-based SME facing ₹2.8 Cr recovery notice by presenting strong hardship evidence.

Key Takeaways

💡 OTS is not a borrower’s right—banks decide case-by-case
💡 Act before DRT case for better negotiation power
💡 Professional help doubles success rate in getting approvals
💡 Always get full discharge certificate after payment

Stuck with NPAs? Get OTS Help Today!

B S Makar, Advocate
📞 *+91-9878131111* | ✉ advbsmakar@gmail.com
🌐 www.makarlaws.com

Don’t let loan stress ruin your peace—explore OTS options now with expert legal support!