Punjab National Bank (PNB) is one of India's largest Public Sector Banks (PSUs). Unlike private banks, PNB follows strict government guidelines and RBI circulars for debt recovery. While this means more bureaucracy, it also means more structured and transparent settlement policies like the One Time Settlement (OTS) schemes.
However, dealing with PNB officials can be daunting. The fear of SARFAESI action (for secured loans) or Section 138 cases (for cheque bounce) is real. At AMA Legal Solutions, we bridge the gap. We understand the internal hierarchy of PNB—from the Branch Manager to the Circle Office—and use this knowledge to negotiate the best settlement for you.
PNB regularly announces special OTS schemes to reduce its Non-Performing Assets (NPAs). The current "Special OTS Scheme 2024-25" is a golden opportunity for borrowers.
*Figures are for illustration. Actual settlement depends on security value and NPA age.
PNB's policy is non-discriminatory but strict. You must prove genuine financial hardship.
Farmers facing crop failure or natural calamities can apply. KCC (Kisan Credit Card) and Tractor loans are often settled in Lok Adalats.
Small businesses facing losses, GST issues, or market slowdowns can seek settlement under the MSME OTS policy.
Salaried individuals facing job loss, medical emergencies, or salary cuts are eligible for settlement of unsecured loans.
Your account must be classified as NPA (usually 90 days overdue).
We submit a formal OTS proposal to the Branch Manager.
The bank assesses the value of security (if any) and your repayment capacity.
The proposal goes to the Circle/Zonal Office for approval based on the amount.
You pay the OTS amount within the stipulated time (usually 3-6 months) to get the NDC.
National Lok Adalats are held quarterly across India. PNB actively refers cases here for quick settlement.
We represent you before the Lok Adalat bench. We ensure that the bank officials do not pressure you into an unfair amount and that the settlement terms are recorded correctly in the award.
For secured loans (Home/LAP/MSME), PNB uses the SARFAESI Act, 2002. This allows them to seize your property without court intervention.
The first warning giving you 60 days to pay. We reply to this notice raising valid objections to stop further action.
If you don't pay, PNB takes symbolic possession. We can challenge this in the Debt Recovery Tribunal (DRT).
The final step. We can still stop the auction by negotiating an OTS or finding a buyer for a private treaty sale.
| Feature | Loan Restructuring | Loan Settlement (OTS) |
|---|---|---|
| What is it? | Extending tenure to lower EMI. | Closing loan with reduced payment. |
| Interest | You pay full interest. | Interest is often waived. |
| CIBIL Score | Maintained (if paid regularly). | Drops (marked as Settled). |
Settlement will mark your account as "Settled" in CIBIL. This is a negative flag. However, it is better than "Written Off" or "Suit Filed".
After settlement, you can rebuild your score by using a secured credit card or a small gold loan and repaying it on time for 12-24 months.
We understand the specific circulars and approval hierarchy of Punjab National Bank.
We physically represent you in Lok Adalats to ensure the settlement decree is in your favor.
From the first legal notice reply to the final No Dues Certificate, we are with you.
"My MSME loan with PNB was in NPA for 2 years. AMA Legal Solutions helped me settle it under the Special OTS scheme. Saved 40% on the total dues."
Suresh Kumar
Ludhiana
"I had a KCC loan issue. The lawyers represented me in the Lok Adalat and got a very fair settlement. Highly professional team."
Rajinder Singh
Amritsar
Yes, PNB regularly launches One Time Settlement (OTS) schemes. Currently, the 'Special OTS Scheme 2024-25' is active for NPA accounts with outstanding dues up to ₹5 Crore. This scheme covers personal loans, MSME loans, and agricultural debts.
Absolutely. PNB has specific provisions for settling agricultural loans (KCC, Tractor Loans) under its OTS policy. Settlements are often approved based on the value of the security and the borrower's repayment capacity, especially during National Lok Adalats.
As a PSU bank, PNB actively participates in National Lok Adalats. This is a government-backed forum where disputes are settled amicably. If your loan is referred to a Lok Adalat, we can represent you to ensure you get a fair settlement decree that is legally binding.
PNB is very strict with willful defaulters (those who have money but refuse to pay). They are not eligible for standard OTS schemes. PNB may initiate criminal proceedings or publish their names. However, if you are wrongly classified as a willful defaulter, we can legally challenge this status.
Settling a secured loan like a Housing Loan is difficult because PNB can sell the property under the SARFAESI Act to recover dues. However, if the property value has fallen or there are legal disputes, a settlement might be possible. We analyze your case to find the best legal route.
There is no fixed percentage. For unsecured loans, settlements can range from 30% to 60% of the outstanding amount. For secured loans, it is usually higher. The amount depends on the NPA category (Sub-standard, Doubtful, or Loss) and the realizable value of any security.
Initial negotiations can be handled by us remotely. However, for the final approval, PNB may require you to sign the compromise deed at the branch. We guide you through every step to ensure you don't sign anything detrimental to your interests.
No bank removes the name immediately. The account status will be updated to 'Settled' or 'Post-Write-off Settled'. While this impacts your score, it stops the accumulation of overdues. You can rebuild your score over time.
PSU banks like PNB have a hierarchical approval process (Branch -> Circle Office -> Zonal Office). The process typically takes 45 to 90 days, depending on the loan amount and the authority level required for approval.
Rin Mukti is one of PNB's popular OTS schemes aimed at small borrowers. It offers attractive waivers on interest and legal charges to encourage borrowers to close their old NPA accounts.
Our loan settlement services are available across all states and union territories in India