4 min read.Updated: 22 Sep 2020, 03:04 PM IST Edited By Anulekha Ray
The restructuring application form shall have the option to apply for one or all the loans by a single application on the bank’s website
From processing fees to documents you need to apply for loan restructuring scheme, here's all you need to know
In March 2020, the Reserve Bank of India (RBI) allowed a moratorium of three months on payment of instalments of loans and later extended it by three months till 31 August 2020. Once the moratorium period is over, the banks have been asked to offer restructuring options for these loans to borrowers. The central bank has permitted the banks to set their own terms and conditions for restructuring of loans.
HDFC Bank has recently released its policy for the restructuring of the loans of individuals and entities that have been impacted due to the COVID-19 pandemic. Take a look
a) Individuals and entities that are classified as standard, but not in default for more than 30 days with the bank as on March 1, 2020 and continue to remain as standard across all its loans or facilities till date are eligible for restructuring.
b) The customer has to be impacted financially by the COVID-19 pandemic in the form of reduction or loss of income or cash flows.
c) The reduction of income and its financial impact on the customer will be reviewed by the bank basis the documents or information provided which does show the drop in cash flow due to the COVID-19 impact. The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring. Apart from the viability calculations, the repayment track record of the customer, and the responses given by the customer while availing moratorium earlier will also be factored in the restructuring decision.
How do customer avail the restructuring benefit loan?
You may visit the bank’s website for the application link to fill the application form and submit the relevant details. Alternatively, you may contact your RM. The link for application will be updated shortly.
What are the restructuring options that are available?
The balance tenure of the loan can be extended by a further period of a maximum of 24 months to ease your monthly EMI repayment burden.
Do customer needs to submit any documents to avail of the restructuring benefit?
The bank will require you to submit documents giving details about the current status of your employment or business. For salaried borrowers - salary slips and bank statement may be required. For self-employed borrowers or entities - Bank statement, GST returns, Income tax returns, Udyam certificate, etc. may be required. You may visit the bank’s website for the online restructuring application link which will be updated shortly.
Will opting for the restructuring package have an impact customer's credit score?
As per regulatory guidelines, your loan or credit facility will be reported to the credit bureau as “Restructured".
Please note that as per regulatory guidelines, restructuring has to be reported at a borrower level to the credit bureaus and hence all the facilities or loans of the borrower with the bank will be classified and reported as “Restructured" even if the borrower has taken restructuring for only one loan.
Will there be any processing fees or charges if customer restructures loans?
The bank may levy a fee if you choose to restructure your loan.
A person holds multiple loans or credit facilities with the bank. Do he or she have to apply separately for each of these loans?
The restructuring application form shall have the option to apply for one or all the loans by a single application on the bank’s website. The bank shall assess the application on regulatory guidelines on the COVID-19 impact and the viability of the repayment plan before decisioning the same.
A person has a credit card with EMI plans within credit limit. Can he or she opt for restructuring of only the card outstanding and not the EMI plans?
The entire credit card balance including the loans within the credit limit will be restructured and converted into a separate loan account.
One has a Jumbo Loan facility on my credit card. Is it mandatory to convert the Jumbo Loan if he or she chooses to restructure the credit card?
You may choose to restructure either the card balance or the Jumbo Loan or both the facilities.
Is there a minimum outstanding requirement for availing the restructuring facility?
Minimum outstanding balance required to convert the card or loan outstanding is ₹25,000.
Will self-employed or entity be eligible for relief?
Self-employed individuals or entities falling under the MSME category as per the revised guidelines for MSME classification rolled out by the Government of India, can apply for relief under the MSME restructuring scheme. Please contact your RM for more details. The Bank would request its self-employed customers to register themselves as MSME through the Udyam portal of the Government wherever applicable.
Can anyone apply for restructuring now as was not able to apply for moratorium before?
The scheme for restructuring is open to all customers of the bank irrespective of the moratorium applied status subject to the borrower meeting the regulatory guidelines of restructuring.
What type of loans are not eligible for restructuring?
-Loans to individuals/entities for agricultural purposes and classified as agricultural loans by the bank
-agricultural credit societies
-financial service providers
-Central, State and local government bodies
-HDFC Bank employees
-Exposures to housing finance companies which have already been rescheduled
-Loans given for commercial usage will be entitled to claim relief under the MSME guidelines as explained in point 12 above.
Will all the co-borrowers of the original loan agreement be required to sign the revised restructuring agreement?
As per regulatory and legal requirements, all borrowers or co-borrowers of the original loan need to agree and sign on any changes in the loan structure including the restructuring agreement, the bank said.
The link for online application will be available soon, the bank said.
In case of further queries, corporate and SME customers are asked to contact relationship manager. For retail individual customers, customers are advised to write to bank on email@example.com.
Source: HDFC Bank website
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