What Percentage Do Banks Accept in OTS?
If you are considering a One Time Settlement (OTS), one of the first questions is: what percentage of the outstanding loan amount will the bank accept? There is no single percentage that applies to every borrower. The settlement amount can vary according to the lender, loan type, account status and financial circumstances.
Indicative settlement ranges can help you understand what may be realistic before starting a negotiation. This guide compares commonly used planning ranges across major banks, private NBFCs and app-based lenders and explains the factors that can change your final OTS offer.
30–70%
Common Planning Range4 Factors
Affect Your OTSWhat Percentage Do Banks Accept in OTS?
The table below gives indicative settlement ranges that can be used as a starting point for understanding OTS negotiations. These are not fixed or guaranteed bank-approved percentages.
| Lender / Category | Loan / Product | Indicative OTS Range | Meaning |
|---|---|---|---|
| HDFC Bank | Credit Card | 30% – 60% | Indicative settlement amount as a percentage of outstanding dues. |
| HDFC Bank | Personal Loan | 40% – 70% | Actual offer can vary according to account circumstances. |
| ICICI Bank | Credit Card | 30% – 60% | Indicative range for planning a settlement discussion. |
| ICICI Bank | Personal Loan | 40% – 70% | Final settlement depends on lender assessment and case facts. |
| SBI | Loan Accounts | 50% – 75% | Indicative range; individual cases can differ significantly. |
| Axis Bank | Loan / Credit Accounts | 40% – 65% | Negotiation outcome depends on account status and recovery prospects. |
| Kotak | Loan / Credit Accounts | 35% – 60% | Indicative range and not a guaranteed settlement slab. |
| Private NBFCs | Loans | 30% – 50% | Settlement practices can differ between individual NBFCs. |
| App Lenders | Digital Loans | 20% – 50% | Account status, lender policy and recovery stage can affect the offer. |
Important: These Are Indicative Ranges
Banks and lenders do not have one universal OTS percentage for every borrower. The percentages above should be treated as indicative planning ranges, not official or guaranteed settlement slabs. Your actual settlement amount may be higher or lower depending on your account, financial hardship, NPA status, collateral and negotiation.
Why There Is No Fixed OTS Percentage
RBI's Framework for Compromise Settlements and Technical Write-offs requires regulated entities to maintain Board-approved policies for compromise settlements. The framework allows lenders to consider factors such as the conditions of the account, minimum ageing requirements, collateral or security value and the permissible sacrifice while deciding settlement proposals.
This means a borrower should not assume that a bank will automatically accept a particular percentage simply because another borrower received a similar offer. The final settlement is decided according to the lender's applicable policy and the individual account.
What Does an OTS Percentage Actually Mean?
OTS percentage means the portion of the outstanding amount that is agreed as the final settlement amount. For example, if your eligible settlement is agreed at 40% on an outstanding amount of ₹10 lakh, the settlement amount would be ₹4 lakh, subject to the exact terms issued by the lender.
The percentage should not be confused with a discount offered automatically to every borrower. A settlement is a negotiated resolution of a stressed account. The lender considers how much it may reasonably recover through settlement compared with the likely recovery from continuing collection or other recovery measures.
4 Factors That Determine Your Specific OTS Percentage
Two borrowers with similar outstanding balances can receive very different settlement offers. The following four factors can have a major effect on the amount a lender may be willing to consider.
1. NPA Age and Account Status
The age and status of the stressed account can influence the lender's recovery approach. A prolonged default may be handled differently from a recently overdue account. The lender may also consider the history of collection efforts and the current status of the account.
2. Financial Distress Evidence
Genuine financial hardship can be important during a settlement review. Evidence such as income reduction, job loss, business problems, unexpected expenses or other financial difficulties may help explain why regular repayment is no longer practical.
3. Collateral Availability
For secured loans, the lender may consider the current realisable value of the collateral. If valuable security is available, the lender's recovery calculation can be different from an unsecured account.
4. Borrower Negotiation
The amount you can arrange, the strength of your financial hardship explanation and the way you present your proposal can influence the negotiation. A realistic offer supported by documents is generally more useful than an arbitrary percentage.
How OTS Percentages Can Differ by Bank and Loan Type
The indicative ranges in this guide are useful for comparing different types of lenders, but they should not be treated as promises from a particular bank. Even within the same bank, a credit card account and personal loan account can have different settlement outcomes.
For example, the indicative range used here for HDFC and ICICI credit cards is 30% to 60%, while personal loans are shown at 40% to 70%. SBI is shown at 50% to 75%, Axis Bank at 40% to 65% and Kotak at 35% to 60%. Private NBFCs and app lenders may show wider variation depending on their individual policies and recovery stage.
These figures are most useful as a starting point for understanding the size of a possible negotiation. They should not be used to assume that a lender must accept the lowest number in the range.
How to Negotiate a Better OTS Offer
If the first settlement amount is higher than you can afford, you can explain your financial position and ask whether the lender can reconsider the amount. The objective should be to reach a figure that you can actually arrange and pay within the agreed timeline.
Calculate Your Realistic Budget
First determine the maximum amount you can arrange without making another unaffordable commitment.
Prepare Hardship Evidence
Keep documents that support your financial difficulty and explain why normal repayment is not currently sustainable.
Make a Realistic Proposal
Explain how much you can arrange and ask the lender to consider a settlement at that amount.
Get the Final Terms in Writing
Do not rely only on a verbal discussion. Review the written settlement terms before making the agreed payment.
What Should You Check Before Paying the Settlement Amount?
A lower OTS percentage is not the only thing that matters. Before making payment, carefully check the written settlement communication issued by the lender.
OTS Percentage FAQs
Common questions about bank settlement percentages and One Time Settlement offers.
What percentage do banks accept in OTS?
There is no single percentage accepted by every bank. Indicative settlement ranges can vary by lender, loan type, account status and borrower circumstances. A commonly discussed range may be around 30% to 70% of outstanding dues, but the actual offer is case-specific.
What percentage does HDFC Bank accept in OTS?
Indicative planning ranges may be around 30% to 60% for credit card accounts and 40% to 70% for personal loans. These should not be treated as officially published or guaranteed HDFC settlement slabs.
What percentage does ICICI Bank accept in OTS?
Indicative ranges may be around 30% to 60% for credit cards and 40% to 70% for personal loans. The actual offer depends on the account and applicable lender policy.
What factors affect an OTS percentage?
Important factors include NPA age and account status, evidence of genuine financial distress, availability and realisable value of collateral, and the borrower's negotiation and repayment capacity.
Can I negotiate a lower OTS amount?
You can ask the lender to reconsider the offer and explain your financial position. However, there is no guarantee that the lender will approve a lower amount.
Does RBI prescribe a fixed OTS percentage?
No. RBI's compromise settlement framework requires regulated entities to maintain Board-approved policies. It does not prescribe one universal OTS percentage for every lender and borrower.
Is OTS percentage the same for credit cards and personal loans?
No. Settlement outcomes can differ by product, lender, account status and recovery circumstances. Credit card and personal loan accounts may therefore receive different settlement offers.
Not Sure What OTS Percentage to Negotiate?
Every settlement case is different. If you are unsure what amount may be realistic for your loan, understanding your account status, financial hardship and lender-specific situation can help you plan your next step.