The Royal Insurance Corporation of Bhutan Limited (RICB) has launched Special Rebate Scheme 2.0, offering significant rebates on outstanding interest and, in selected cases, principal amounts to help eligible borrowers settle legacy non-performing loans (NPLs), charged-off loans and certain high-risk accounts.
The scheme is aimed at resolving long-pending loan accounts while strengthening the corporation’s loan recovery efforts and improving overall asset quality.
Under the scheme, eligible borrowers can receive rebates depending on the type of loan, recovery prospects, collateral position and the circumstances of the borrower. However, all applications will remain subject to assessment and approval by the competent authority.
The corporation has introduced four rebate options, covering different categories of borrowers and loan situations.
100% interest waiver for charged-off loans
Under Scheme I, eligible borrowers can receive a 100 percent rebate on outstanding interest if they settle the loan in full through an upfront cash payment. The scheme applies to charged-off loans sanctioned prior to 2019.
The interest rebate is intended to provide borrowers with an opportunity to clear long-standing obligations by removing the accumulated interest component, while enabling RICB to recover the outstanding principal.
Under Scheme II, eligible borrowers may receive a 10 percent rebate on outstanding principal, along with a 100 percent rebate on outstanding interest. The corporation has advised borrowers seeking to determine their eligibility under this scheme to contact the concerned officials for further information and assessment.
A more substantial concession is available under Scheme III, under which borrowers may receive a 50 percent rebate on outstanding principal and a 100 percent rebate on outstanding interest.
However, Scheme III is narrowly targeted at cases where borrowers have been officially declared deceased or imprisoned and are untraceable by the relevant authority.
RICB has clarified that where collateral or other recoverable assets exist in such cases, recovery efforts will first be pursued. Any applicable rebate will be considered only on the remaining deficit balance after the realisation of such assets.
Under Scheme IV, eligible loans may be transferred to a new borrower who is considered financially viable. The existing borrower may receive a 30 percent rebate on outstanding interest following an approved loan transfer.
The transfer, however, must comply with RICB’s prevailing credit policy, credit norms and delegated authority requirements. The incoming borrower may also qualify for an interest-rate concession of 0.50 percentage points, or 50 basis points, from the prevailing lending rate, provided the transferred account remains regular for a continuous period of 12 months.
If the transferred loan becomes non-performing within 12 months, the 50-basis-point concession will be withdrawn and recovered. The corporation has stipulated that Schemes I to IV will apply only where borrowers make an upfront cash settlement in accordance with the approved terms.
For the purpose of calculating the outstanding amount, interest outstanding will include accrued interest, FEIF, IPS and late fees. Any repayment received under the scheme will be appropriated in a prescribed order, beginning with late fees, followed by outstanding interest and then principal.
The scheme covers loans originally sanctioned prior to December 2019. Importantly, the principal rebates under Schemes II and III are available only to borrowers who settle their accounts on or before 30 September 2026. After that date, only the applicable interest rebate may be considered.
However, RICB has emphasised that not every borrower will automatically qualify for a particular rebate. For active loan accounts, the applicable scheme will be determined and approved by management. The corporation will consider factors including documented eligibility, recovery prospects, legal considerations, collateral and other relevant circumstances before determining the most appropriate option.
It has also clarified that submission of an application does not constitute approval, while RICB reserves the right to approve, modify or decline applications based on eligibility, recovery analysis, legal considerations, regulatory requirements, delegated authority and the commercial interests of the corporation.
The scheme therefore provides borrowers with an opportunity to resolve long-standing debt, while protecting the corporation from indiscriminate write-offs and ensuring that recovery decisions are made on a case-by-case basis.
Deadline set for December 2026
The final deadline for submitting applications under Special Rebate Scheme 2.0 is 15 December 2026.
An official from RICB noted. “For borrowers with legacy accounts, the scheme could provide a limited window to settle outstanding obligations at substantially reduced costs, particularly where accumulated interest has significantly increased the total amount payable.”
For RICB, meanwhile, the initiative is intended to balance loan recovery with borrower relief, allowing the corporation to recover funds tied up in long-pending accounts while improving the quality of its loan portfolio.
Tashi Namgyal, Thimphu
