HDFC Bank Ltd on Tuesday said that retail customers seeking to restructure debt should have minimum outstanding balance of ₹25,000 in their loan accounts. It also offered an extension of loan tenures by up to two years to provide relief to its retail and corporate customers hit by the covid-19 pandemic. The private lender will levy a processing fee to restructure the loan.
According to the bank, individuals and entities that are classified as standard, but not in default for more than 30 days with the bank as on 1 March 2020, and continue to remain as standard across all its loans facilities till date are eligible for restructuring.
Customers can fill up the application form on the bank’s website, which will be made available, and submit the same to the bank. They will also have to submit documents giving details about the current status of employment or business.
For credit card customers, the entire balance, including loans within the credit limit, will be restructured and converted into a separate loan account.
In line with regulatory guidelines, the loan facility will be reported to the credit bureaus as “restructured”, the bank said. “As per the guidelines, restructuring has to be reported at a borrower level to the credit bureaus and hence all the facilities/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,” the bank said.
HDFC follows state-run State Bank of India which on Monday launched a portal on its website to enable its retail customers to check their eligibility for restructuring under the Reserve Bank of India (RBI) scheme.
SBI’s customers will be offered two options including a moratorium to up to two years and rescheduling of instalments and extension of tenure by a period equivalent to the moratorium granted subject to a maximum of two years.
The loans on which the options will be levied include housing, education, and auto loans.
According to RBI’s Resolution Framework for covid-19-related stress, the resolution of stressed personal loans will be available only to those borrowers who were repaying their loans regularly as on 1 March 2020.
Borrowers will need to get a resolution plan sanctioned before 31 December and the lender will need to implement it within 90 days. The restructured loan will continue to be considered as standard till the borrower sticks to the resolution plan. Banks can reschedule the payments, convert interest into another credit facility and provide moratorium of up to two years. The overall tenure of the loan can also be modified based on the resolution granted.
