State Bank of India has detailed the process and rules it intends to follow when the country’s largest lender begins an exercise to restructure personal loans, as permitted by the Reserve Bank of India.
The bank on Monday launched a website where borrowers can check their eligibility and upload relevant documents. This preliminary verification would be followed by scrutiny and approval at the branch level.
Based on a set of posted FAQs, the bank will evaluate applications based on whether borrowers have lost their jobs or seen their income reduced as a result of the Covid-19 crisis. If clients pass that scrutiny, they may be eligible for an extension of their loan tenure, with a commensurate change in their equivalent monthly installments or EMI.
However, this would come at a cost.
CS Setty, managing director of SBI, said the bank has yet to receive a large number of personal loan restructuring requests. The bank is expanding its reach to ensure that borrowers come forward sooner rather than later to take advantage of the scheme.
When asked if restructuring personal loans would affect a borrower’s credit rating, Setty said he was unsure. “I cannot comment on whether credit scores would be affected. It is a very peculiar situation. Our opinion is that it should not be affected. “
The key aspects of the bank’s FAQs are reproduced below:
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