Non-Compliance with RBI Circular While Considering OTS Proposal: Rajasthan HC stays Direction to Deposit ₹7 Crore for Fresh Consideration

The Rajasthan High Court has stayed a direction to deposit a certain amount for fresh consideration of an OTS (One-Time Settlement) proposal, citing non-compliance with an RBI circular. The court observed that the bank had not adhered to the guidelines issued by the Reserve Bank of India while evaluating the settlement offer. This ruling underscores the judiciary's role in ensuring financial institutions follow regulatory mandates, particularly when dealing with debt resolution mechanisms. It offers relief to the applicant by mandating a re-evaluation of the OTS proposal in strict accordance with RBI directives, promoting transparency and fairness in debt settlements.