HDFC Bank has recently published its policy for the restructuring of loans from individuals and entities that have been affected by the COVID-19 pandemic. Have a look
Who is eligible for restructuring?
a) Individuals and entities that are classified as standard, but are not in default for more than 30 days with the bank as of March 1, 2020 and continue to be standard in all their loans or facilities to date, are eligible for restructuring .
b) The customer must be financially affected by the COVID-19 pandemic in the form of reduction or loss of income or cash flows.
c) The reduction in income and its financial impact on the client will be reviewed by the bank based on the documents or information provided that does demonstrate the drop in cash flow due to the impact of COVID-19. The bank will assess the client’s viability to pay for the restructured EMI based on the documents provided, prior to granting the restructuring. Aside from the feasibility calculations, the client’s refund history and the responses given by the client while under the moratorium previously will also be taken into account in the restructuring decision.
How does the client benefit from the restructuring benefit loan?
You can visit the bank’s website for the application link to complete the application form and submit the relevant details. Alternatively, you can contact your RM. The link for the app will be updated shortly.
What are the restructuring options available?
The loan balance tenure can be extended for an additional period of up to 24 months to ease your monthly EMI repayment burden.
Does the client need to present any documents to take advantage of the restructuring benefit?
The bank will ask you to submit documents with details about the current status of your employment or business. For salaried borrowers, pay stubs and bank statements may be required. For Borrowers or Self-Employed Entities: Bank Statement, GST Returns, Income Tax Returns, Udyam Certificate, etc. may be required. You can 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 on the customer’s credit rating?
According to regulatory guidelines, your loan or line of credit will be reported to the credit bureau as “Restructured.”
Please note that according to regulatory guidelines, restructuring must be reported at the borrower level to credit reporting agencies and therefore all borrower facilities or loans with the bank will be classified and reported as “Restructured” even if the borrower has done the restructuring. for a single loan.
Will there be any processing fees or charges if the client restructures the loans?
The bank may charge a fee if you choose to restructure your loan.
A person has several loans or credit facilities with the bank. Do you have to apply for each of these loans separately?
The restructuring application form will have the option of applying for one or all of the loans through a single application on the bank’s website. The bank will evaluate the application of regulatory guidelines on the impact of COVID-19 and the feasibility of the payment plan before making a decision on it.
A person has a credit card with EMI plans within my credit limit. Can you choose to restructure only the pending card and not the EMI plans?
The entire credit card balance, including loans within the credit limit, will be restructured and converted to a separate loan account.
One has a Jumbo loan facility on my credit card. Is it mandatory to convert the Jumbo Loan if you choose to restructure the credit card?
You can choose to restructure the card balance or the Jumbo Loan or both.
Is there a pending minimum requirement to make use of the restructuring mechanism?
The minimum outstanding balance required to convert the outstanding card or loan is Rs. 25,000.
Will the self-employed or entities be eligible to receive help?
Self-employed persons or entities belonging to the MSME category according to the revised guidelines for MSME classification implemented by the Government of India can apply for help under the MSME restructuring plan. Contact your RM for more details. The Bank would ask its autonomous clients to register as MSMEs through the Government’s Udyam portal when appropriate.
Udyam portal link: https://udyamregistration.gov.in/Government-of-India/Ministry-of-MSME/online-registration.htm
Can anyone request a restructuring now since they could not request a moratorium before?
The restructuring plan is open to all the bank’s clients, regardless of the applied default status, as long as the borrower complies with the regulatory guidelines for restructuring.
What types of loans are not eligible for restructuring?
-Loans to natural / legal persons for agricultural purposes and classified as agricultural loans by the bank
-agricultural credit companies
-financial service providers
-Central, state and local government agencies
-HDFC Bank employees
-Exposures to housing finance companies that have already been rescheduled
– Loans granted for commercial use will have the right to claim an exemption in accordance with the guidelines of MSMEs, as explained in point 12 above.
Will all co-borrowers of the original loan agreement be required to sign the revised restructuring agreement?
Under regulatory and legal requirements, all borrowers or co-borrowers of the original loan must agree to and sign any changes to the credit structure, including the restructuring agreement, the bank said.
The link for the online application will be available soon, the bank said.
For further inquiries, corporate and SME clients are asked to contact the relationship manager. For individual retail clients, clients are encouraged to write to the bank at [email protected].
Source: HDFC Bank website
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