HDFC Bank Ltd said on Tuesday that retail clients seeking to restructure debt must have a minimum outstanding balance of ₹25,000 in your loan accounts. It also offered an extension of loan tenure for up to two years to provide relief to its retail and corporate clients affected by the COVID-19 pandemic. The private lender will charge a processing fee to restructure the loan.
According to the bank, individuals and entities that are classified as standard, but are not in arrears for more than 30 days with the bank as of March 1, 2020, and continue to be standard on all of their credit lines to date are eligible for restructuring.
Customers can complete the application form on the bank’s website, which will be available, and submit it to the bank. They will also need to submit documents with details about the current status of the job or business.
For credit card customers, the entire balance, including loans within the credit limit, will be restructured and converted to a separate loan account.
According to regulatory guidelines, the credit line will be reported to credit bureaus as “restructured,” the bank said. “According to the guidelines, the restructuring must be reported at the borrower level to the credit bureaus and therefore all the borrower’s lines / loans with the bank will be classified and reported as ‘restructured’ even if the borrower has accepted restructuring for a single loan, “said the bank.
HDFC follows State Bank of India, which on Monday launched a portal on its website to allow its retail clients to verify their eligibility for restructuring under the Reserve Bank of India (RBI) scheme.
SBI clients will be offered two options that include a moratorium of up to two years and the rescheduling of fees and extension of tenure for a period equivalent to the moratorium granted subject to a maximum of two years.
Loans on which options will be charged include home, 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 paying their loans regularly as of March 1, 2020.
Borrowers must approve a resolution plan by December 31, and the lender must implement it within 90 days. The restructured loan will continue to be considered standard until the borrower adheres to the resolution plan. Banks can reschedule payments, convert interest to another line of credit, and grant a moratorium of up to two years. The general tenure of the loan can also be modified depending on the resolution granted.
.
