Banking · Debt Recovery and Settlement
A bank offers a One Time Settlement (OTS) to a retail borrower whose total dues (Principal plus Interest) are Rs. 12 lakhs. The bank offers a 25 percent waiver on the total dues. The borrower agrees but fails to pay the full OTS amount within the stipulated 90 days. The OTS agreement has a clause stating 'failure to pay will revive the original debt'. If the borrower pays Rs. 4 lakhs during the OTS period and then defaults on the remaining balance, what is the remaining liability of the borrower according to the revival clause?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Rs. 12,00,000
- 2Rs. 9,00,000
- 3Rs. 8,00,000✓
- 4Rs. 5,00,000
Correct answer
Rs. 8,00,000
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