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Credit Card NPA due to medical emergency – Can bank refuse One-Time Se


02-Jan-2026 (In Recovery Law)
My Indian Overseas Bank credit card (~₹1.37 lakh) is NPA due to severe pregnancy-related medical complications and job loss. I want to settle the account peacefully. Under RBI guidelines, is the bank required to consider One-Time Settlement? Can I legally settle by paying around 30–40% of dues as full and final settlement? What remedy do I have if recovery pressure continues?
Answers (3)

Answer #1
722 votes
Banks are not legally bound to grant OTS, but RBI permits it on hardship grounds. Settlement at 30–40% is discretionary. Harassment violates RBI norms—complain to bank, Banking Ombudsman, or police or file a Petition in Court to stop Harrassment.
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Advocate Pankaj Bajaj

Adv. Pankaj Bajaj

LawRato Pune | 700+ Answers
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Answer #2
787 votes
you can settle this case in lok Adalat, usually the banks and NBFC's in personal loan and credit card case give settlement offer for 30-40% one time settlement amount, but if you still cannot pay that much amount let them file a case against you and you can settle later for more amount 50-60%
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Advocate Moksh Jain

Adv. Moksh Jain

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Answer #3
925 votes
Credit card becoming NPA If dues remain unpaid (generally 90+ days), the account becomes NPA. Bank may continue recovery, issue legal notices, or file a civil recovery case. 2. One Time Settlement (OTS) OTS is a concession, not a right. Bank may accept or reject based on: Amount due Past repayment conduct Internal recovery policy 3. Medical emergency Serious illness is a valid humanitarian ground. RBI guidelines encourage fair treatment, but do not compel banks to grant OTS
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Advocate Prashant Gupta

Adv. Prashant Gupta

LawRatoMumbai | 50+ Answers
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