To help those borrowers who have been finding it difficult to pay back loans, the Reserve Bank of India (RBI) had lent a helping hand in the form of loan restructuring.
In 2020, the RBI had announced a loan restructuring program. And then in May 2021, due to the second wave of Covid-19, it announced a second resolution framework for many borrowers including individual borrowers.
Various banks have announced the terms and conditions for availing their loan restructuring 2.0.
Here is a look at the FAQs of HDFC Bank’s loan restructuring policy 2.0 as per the lender’s website.
- What is the restructuring 2.0 scheme approved by RBI?
RBI has provided a framework to banks & lending institutions for implementation of resolution plans for addressing the economic fallout due to the COVID-19 pandemic which has led to significant financial stress for customers. Basis the framework and regulatory guidelines, your bank has framed its policy for the restructuring of the loan/s of individuals and entities that have been impacted due to the COVID-19 pandemic. - Who is eligible for restructuring?
a) Individuals and Entities that are classified as Standard with the bank as on April 1, 2021. b) The customer has to be impacted financially by COVID-19 pandemic in the form of reduction/ loss of income or cash flows. c) Only those accounts, which are on the bank’s book as on April 1, 2021 will be eligible. c) The reduction of income and its financial impact on the customer will be reviewed by the bank basis the documents / 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, credit bureau records, and the responses given by the customer while availing moratorium earlier will also be factored in the restructuring decision. - Which are the products covered under the regulatory restructuring relief package.
* Credit Card receivables* Auto Loans and Two-wheeler Loans * Personal Loans (both for personal use and for business / commercial purposes)* Personal Loans to professionals * Education Loans* Loans given for creation/ enhancement of immovable assets (e.g., housing loans)* MSME loans with Udyam certificate (The borrower should be classified as a MSME on March 31, 2021 in terms of Gazette Notification S.O. 2119 (E) dated June 26, 2020) - What type of loans are not eligible for restructuring?
Loans to the following entities/individuals are not eligible for restructuring: -* 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 which have been already restructured once - How do I avail the restructuring benefit on my loan?
You may visit the bank’s website for the application link, fill the application form and submit the relevant details.Login to the application form with your Loan Account Number / Credit Card Number / Email ID registered with the bank and the OTP sent on your registered mobile number/ Email. If you have changed your number, please give a written request for change in number at the nearest branch, and apply post the number has changed on system.Alternatively, you may contact your Relationship Manager (RM). - Can I apply multiple times?
No. You can apply for restructuring only once. - What are the restructuring options that are available to me?
The balance tenure of the loan can be extended by a further period of maximum 24 months, including the moratorium period at the bank’s discretion to ease your monthly EMI repayment burden. - Do I need 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 for the month of March 2021 and latest salary slip for last 2 months* A declaration of estimated salary/income immediately after the end of the desired restructuring period (Maximum 24 months).* Letter of discharge from job (in case of job loss)* Bank account statements of the account where salary is credited in case of salaried employees from Oct 2020 to date For self-employed borrowers/ entities:* Current / CC account bank statement from 1st April 2020 till date * GST returns Oct-2020 till date * Income tax returns for FY-19 & FY-20 and FY-21 (if filed) * Profit and loss statement / Balance sheet for the last 2 years* Udyam certificate * Declaration by self-employed professionals/ businessmen declaring that their business is affected by Covid-19.Please do keep these documents ready before you apply on the link, as incomplete applications are unlikely to be processed. - Will opting for the restructuring package have an impact on my credit bureau report?
As per regulatory guidelines, your loan/credit facility will be reported to the credit bureau as “Restructured”. - I hold multiple loans/credit facilities with the bank. Do I 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. - I have a credit card with EMI plans within my credit limit. Can I 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. - I have a Jumbo Loan facility on my credit card. Is it mandatory to convert the Jumbo Loan if I choose to restructure the credit card?
You may choose to restructure either the card balance or the Jumbo Loan or both the facilities. - Will my credit card be blocked or deactivated if I avail of the restructuring scheme?
Your credit card will be deactivated without any further notice once the restructuring is approved for any of the loans / credit cards you have with the bank. The bank may choose to reinstate fresh limits at its discretion on the card after 12 months basis the repayment behaviour on the loan EMIs. - Is there a minimum outstanding requirement for availing the restructuring facility?v
Minimum outstanding balance required to convert the card/loan outstanding is Rs. 25,000. - I am self-employed/ entity having my small-scale unit. Am I eligible for relief?
Self-employed individuals/entities are eligible for relief for both under the MSME category as well as the Non-MSME category. The Bank would request its self-employed customers to register themselves as MSME through the Udyam portal of the Government wherever applicable. Udyam portal link: https://udyamregistration.gov.in/Government-of-India/Ministry-of-MSME/online-registration.htm - Can I apply for restructuring now as I 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. - I have already availed of restructuring. Can I avail this once again?
If you have already availed restructuring, you are not eligible for restructuring under this scheme. However if you have not availed of the full benefit of 24 month tenor extension in the earlier scheme which ended on 31st Dec, the bank can evaluate and provide relief to the extent of overall tenor extension of 24 months. - My loan was taken along with a co-borrower/s. 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/co-borrowers of the original loan need to agree and sign on any changes in the loan structure including the restructuring agreement. - What is the last date of making applications through the portal.
The link on the portal will be live till 20th September 2021 for customers with single loan or overall exposure less than 25 Lacs. - How much time will it take for me to know the status of the restructuring application.
The bank will process and communicate the status of the application to the customers in 10 to 14 working days. - How will I get the approval and communication for acceptance?
The bank will communicate the status of the restructuring request vide text message or email on the registered phone number or email address. - Will I need to do further documentation for restructuring?
For all loans, you would have to sign the restructuring agreement post approval for the bank to effect restructuring. If you are sole borrower, bank will provide digital options for signing the agreements. In case there are two or more applicants on the loan structure, then all applicants will be required to accept the terms by putting physical signatures on the application and revised agreement, and this agreement will need to be submitted at the nearest customer service desk. The customer will get a copy of the revised terms and amort schedule on their registered mail id / by regular post.
