Compromise settlement refers to a negotiated settlement where a borrower offers to
pay and the Bank agrees to accept in full and final settlement of its dues an amount less
than the total amount due to the Bank under the relative loan contract. This settlement
invariably involves a certain sacrifice by the Bank by way of write off and/or waiver of a
portion of its dues on a one-time basis. The Policy recognizes that it is not possible to lay
down precise guidelines which can be followed uniformly in case of all compromise offers
as each offer is unique in the context of circumstances necessitating its consideration as
a recovery option.