1. What is meant by conclusion of recovery proceedings?

The recovery proceedings would be stated as concluded after the decree has been enforced and recovery has been completed by the MLI and outstanding amount has been recovered by the MLI or decree to get time barred if no further recovery possible.Please refer Circular No.135.

2. Can a lending institution go for one time settlement (OTS) in respect of defaulted cases, which are covered under the Scheme?

Yes. The lending institution is, however, required to keep the Trust informed. In order to avail claim, legal action must be initiated by the MLI even in the event of OTS.

3. Who will bear the legal expenses of recovery, MLIs or borrower or CGTMSE?

Initially, the legal expenses will be borne by the MLI. At the time of remittance of recovery proceeds to CGTMSE by the MLI, same may be deducted.

FAQ for legal waiver

1. Whether the MLI can initiate legal action for accounts where legal waiver is applicable?

MLI is free to initiate legal action but it is not required for lodgment of 1st installment of claim. Accordingly, the system allows to select only legal waiver option for accounts where legal waiver is applicable.

2.While lodging claim for accounts where legal waiver is applicable, whether MLI must upload committee report for not initiating legal action for filing claim under the Scheme?

No, it is not required if the claim is lodged on or after 01/04/2023.

3.Whether legal waiver is applicable for accounts where NPA date is before 01/04/2023 and claim lodged on or after 01/04/2023?

Yes

4. Whether legal waiver is applicable at the time of lodgment of 2nd installment of claim?

While lodging 2nd installment of claim for accounts against which 1st installment of claim has been lodged prior to 01/04/2023 will be guided as per guidelines prevailing at time of lodgment of 1st claim. While lodging 2nd installment of claim for accounts against which 1st installment of claim has been lodged on or after 01/04/2023 , waiver of legal action up to ₹10 lakh per claim will be applicable.