For those who took margin money loans 10 years ago
THIRUVANANTHAPURAM: The Government has announced a scheme for the One-Time Settlement (OTS) of defaulted repayment of loans taken by Small Scale Industrial (SSI) units towards margin money.
In a release here on Friday, the Industries Minister's office said nearly one lakh entrepreneurs would benefit by this OTS scheme. The `margin money' concept was put in operation in the State in 1979.
Entrepreneurs who took loans under the scheme were to repay the amounts in 16 equal instalments after four years of starting their units.
However, many of them could not make repayments. Some of the units were wound up and in some cases the borrowers were no more. The Government received several representations seeking concessions in interest rates and penal interest, the release said, explaining the context of the OTS.
The scheme will be open for six months from October 19, the date on which the Government issued the order relating to it. It is meant for those who took margin money loans 10 years ago and before.
Under this scheme, the loan accounts have been segregated into five categories:
Accounts of borrowers who are dead, with the units they started no longer functioning, come under the first category. In such cases, the principal and the interest and the penal interest will be waived. Legal heirs have to submit the documents qualifying them for the waiver. The second category covers units that have either vanished or are totally defunct, leaving no assets behind. Here, the scheme offers waiver of interest and penal interest. The borrowers will have to repay the principal in one remittance.
The third covers units remaining closed for three years [or more]. In such cases, the borrowers have to repay the principal and 25 per cent of the interest, or 125 per cent of the principal whichever is less. Units working on loss for three years [or more] come under the fourth category. In such cases, the borrowers are required to repay the principal and 50 per cent of the interest and penal interest, or 200 per cent of the principal whichever is less.
The last category involves units that intend to revive their operations before April 1, 2007. Such units will get the facility of repaying their dues in instalments.
Fifty per cent of the principal will have to be settled in three equal instalments within one year, while the remaining 50 per cent need be repaid only after five years.
Interest and penal interest on their loans will be completely waived, the release said.