The Government of Maharashtra has launched a one-time settlement scheme to recover non-performing assets (NPAs) of cooperative banks in the state. The scheme, called the Maharashtra Cooperative Societies (Third Amendment) Act, 2021, aims to provide relief to the state's cooperative banks that have been struggling to recover their NPAs due to various reasons, including the impact of the COVID-19 pandemic.

Under the scheme, cooperative banks in Maharashtra can settle their NPAs with borrowers by offering them a one-time settlement (OTS) option. The OTS option allows borrowers to repay a portion of their outstanding loan amount in exchange for a waiver of the remaining balance. The scheme is expected to help cooperative banks recover a significant portion of their NPAs and improve their financial health.

The scheme is applicable to all cooperative banks in Maharashtra, including urban and rural cooperative banks, credit societies, and district cooperative banks. The scheme is voluntary, and borrowers can choose to opt for the OTS option if they meet the eligibility criteria.

To be eligible for the OTS option, borrowers must have defaulted on their loan repayments for a minimum of three years. Borrowers who have already settled their outstanding loan amount or whose cases are under litigation are not eligible for the scheme. Borrowers who opt for the OTS option must pay 25% of the outstanding loan amount upfront and the remaining 75% in three equal installments over the next three years.

The scheme has several benefits for both cooperative banks and borrowers. For cooperative banks, the scheme provides a way to recover their NPAs and improve their financial health. For borrowers, the scheme offers a way to settle their outstanding loan amount and avoid further legal action.

In conclusion, the Government of Maharashtra's launch of a one-time settlement scheme for recovering NPAs of cooperative banks is a welcome initiative that aims to provide relief to the state's struggling cooperative banks. The scheme is expected to help cooperative banks recover a significant portion of their NPAs and improve their financial health, while also offering a way for borrowers to settle their outstanding loan amount and avoid further legal action. The success of the scheme will depend on its implementation and the willingness of borrowers to opt for the OTS option.