SBI Launches Mega Debt Settlement Scheme: Up to 50% Waiver for Farmers on NPA Loans; Deadline Set for June 2026
The State Bank of India (SBI) has introduced a 'One-Time Settlement' (OTS) scheme for agricultural loans categorized as Non-Performing Assets (NPA). Eligible farmers can settle their long-pending debts with a waiver of up to 50% on the principal and 100% on interest, aiming to clear rural credit bottlenecks.
In a move that is expected to benefit thousands of debt-ridden farmers in Maharashtra, the State Bank of India (SBI) has officially launched its 'One-Time Settlement' (OTS) Scheme 2026. This initiative is specifically targeted at agricultural loans that have been classified as Non-Performing Assets (NPA) for over two years. Under this scheme, the bank is offering a massive reduction in the total outstanding amount, allowing farmers to close their loan accounts by paying a fraction of the original debt.
The settlement criteria are designed to provide maximum relief to small and marginal farmers. Depending on the age of the NPA and the value of the collateral, farmers can avail a waiver of 40% to 50% on the principal amount. More importantly, the bank has decided to waive off 100% of the accumulated interest and penal charges for eligible accounts, significantly lowering the burden for borrowers who have been unable to pay due to crop failures or market volatility.
To avail of this benefit, farmers must visit their respective SBI home branches to check their eligibility. Once the settlement amount is agreed upon, the farmer is usually required to pay an initial 10% to 25% of the settled amount upfront, with the remaining balance to be cleared within a stipulated period, typically by June 30, 2026. This time-bound window is intended to clean up the bank's balance sheet while providing farmers with a "clean slate" to apply for fresh agricultural credit for the upcoming Kharif season.
Agricultural experts in Maharashtra have welcomed the move but urged the government to ensure that the process is transparent and free of middlemen. Many farmers in regions like Vidarbha and Marathwada, who have been out of the formal credit system due to old defaults, now have a golden opportunity to restore their CIBIL scores and regain access to low-interest crop loans and government subsidies.
SBI officials have clarified that this is a "limited-time offer" and may not be repeated in the near future. Farmers are encouraged to submit their applications along with basic documents like the 7/12 extract and original loan papers. The bank has also started conducting 'Rinn Mukti' camps in various tehsils across Maharashtra to provide on-the-spot eligibility checks and settlement advice.
