State Bank of India is offering a moratorium of up to two years to retail borrowers under the loan restructuring scheme approved by the Reserve Bank of India. Home, education, auto or personal loans will be included in the loan restructuring option. The client must pay the interest during the two-year moratorium period. India’s largest lender will also charge an additional 0.35% annual interest under the loan restructuring plan.
Retail borrowers will have the option to opt for a 1 to 24 month moratorium. To request the moratorium, the loan must be a “ standard account ” on the date of request for compensation under this framework and must have been “ standard ” and not in moratorium for more than 30 days from the 01.03.2020, the bank said.
Those who have been affected by the coronavirus pandemic will be eligible for the scheme. A borrower will be considered affected by the COVID-19 pandemic, if any of the following conditions are met: 1) Salary or income in August 2020 was reduced compared to February 2020, 2) Salary reduction or suspension during the blocking period, 3) Loss of employment / company closure or 4) Closure during closure or reduction of activity of units or shops or commercial establishments in the case of freelancers or professionals / entrepreneurs.
The client can visit the official SBI website to request the loan restructuring option. The borrower must enter valid details such as account numbers and mobile phone numbers on the bank’s website. Then the application will be validated by an OTP. The client will know if they are eligible for the program and will receive a referral number. This reference number will be valid for 30 days. Then the borrower can visit the nearest SBI branch to complete the required paperwork.
Here is the list of the documents that need to be uploaded if you apply online:
1) Salary slips for the month of February 2020 and current / most recent pay slip.
2) A statement of estimated salary / income immediately after the end of the desired moratorium period (maximum 24 months).
3) Letter of withdrawal from work (in case of job loss).
4) Account statements of the account where the salary is credited in the case of employees or operating account statement in the case of entrepreneurs or self-employed or professionals for the period of February 2020 up to 15 days before the submission of the application.
5) Declaration of freelancers / entrepreneurs who declare that their business is affected by COVID-19.
The client will also have the option of visiting the branch where the account is maintained and submitting the loan restructuring request.
How will it work?
Because of the moratorium granted, your loan tenure will be extended for the moratorium period and the EMI payable after the moratorium will be recalculated. The bank will charge an additional interest of 0.35% per annum above its current price for the remaining period of the loan. This is to offset the partial cost of the additional provisions the bank must make, the bank said.
The last date to request relief from the loan restructuring plan is December 24.
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