Defaulting borrowers with an outstanding amount of less than Rs 25,000 can settle their debts with a compromise scheme launched by UCO Bank in Orissa.

The public sector lender has introduced a compromise scheme whereby loans that have been shifted into the non-performing assets (NPAs) category can be cleared by paying 10% to 50% of the outstanding amount.

However the compromise will depend upon the time period for which the loan was under the NPA category, said the Uco Bank's zonal manager (Bhubaneswar zone), N Sambasiva Rao.

He informed that the scheme is going to remain operational until the end of March 2009 and is expected to benefit 4,013 NPA account holders with an outstanding loan amount of Rs 3.94 crore.

UCO bank has 184 branches and three zones in Orissa. The Bhubaneswar zone comprises of 68 branches and out of these, 28 branches have come under the core banking solutions (CBS) platform. The remaining branches will also shift to this platform by March 2010.

Rao said that the bank has set a total target of Rs 3672 crore by the end of current fiscal and it has already achieved Rs 3132 crore and hopes to reach its target without any difficulty.

As per the current fiscal, the bank's zone has extended loans amounting to Rs 1080 crore that includes Rs 108 crore credit to the small and medium enterprises (SMEs) in the state.

Recently UCO Bank has also slashed its benchmark prime lending rate (PLR) and deposit rates by 50 basis points.