Pune: The Rupee Bank continues to face challenges in recovering outstanding loans despite multiple extensions to the Special One-Time Loan Repayment Scheme. As of December 31, 2023, the bank had 1,338 Non-Performing Asset (NPA) accounts, with total overdue loans amounting to ₹1,519 crore. The lack of progress in loan recovery poses a significant obstacle to the bank’s proposed merger with a financially stronger institution.
Government’s Intervention
To facilitate loan recovery and address the issue, the state government has granted an extension to Rupee Bank’s Special One-Time Loan Repayment Scheme until March 31, 2025. The government resolution, issued by Manjusha Salvi, Under Secretary, Cooperation Department, specifies that only accounts classified as NPAs on or before October 31, 2022, will be eligible for the scheme. Additionally, accounts already under legal recovery actions, including those processed under the Securitization Act, will also qualify.
Recovery Challenges and Potential Solutions
Rupee Bank's overdue accounts are predominantly old, making recovery efforts more challenging. The government has emphasized that the recovery of these loans is essential for reducing the bank's accumulated losses and improving its liquidity position. This, in turn, would smoothen the process of the bank’s merger with another competent financial institution.
The bank has also offered certain concessions on interest to encourage defaulters to settle their dues under the scheme. Reports indicate that some defaulters are willing to close their NPA accounts if such concessions are provided.
Monitoring and Compliance
To ensure effective implementation of the scheme, the government has instructed the Commissioner for Cooperation to conduct monthly reviews. The reviews will focus on ensuring that Rupee Bank adheres strictly to the conditions set by the Reserve Bank of India (RBI).
The extension aims to provide Rupee Bank with a final opportunity to recover overdue loans and improve its financial standing before any merger proceedings are finalized.