The announcement by SBI comes after the Reserve Bank of India (RBI) last month permitted one-time restructuring of both corporate and retail loans without getting classified as a non-performing asset (NPA) amid the ongoing Covid-19 crisis.
“The purpose of this Framework is to provide relief to units who otherwise have a good track record, but whose operations have been adversely affected by the Covid-19 pandemic and their debt burden becoming disproportionate relative to their cash flow generation abilities,” SBI said in a set of FAQs released to address customers’ que
Earlier this month, finance minister Nirmala Sitharaman had asked banks and non-banking finance companies (NBFCs) to roll out the loan restructuring scheme by September 15.
How to check eligibility and apply
SBI’s retail loan customers can login to the restructuring scheme portal using their loan account number. Customers will then need enter the OTP received followed by a few more information. On doing this, the user will get to know their eligibility status and also receive a reference number.
The reference number will be valid for a period of 30 days within which the user needs to visit the bank branch to complete the requisite formalities. Once all such formalities are done, the restructuring process will be completed.
Which loans are eligible for scheme
The loan should be a standard account on date of application under this framework. It should not be in default for more than 30 days as on March 1, 2020. In addition, the income of the person should have been impacted by Covid.
A borrower will be considered as affected by Covid-19 pandemic, if any of the following conditions are fulfilled:
* Salary/income in August 2020 has got reduced as compared to that of February 2020
* Reduction/suspension in salary during lockdown period
* Job Loss/closure of business
* Closure during lockdown/reduced activity of units/shops/business establishments in case of self-employed/professionals/businessmen
Relief/relaxations available under the framework
The following relief/relaxations may be sanctioned under the Framework subject to compliance of bank norms:
* Moratorium of upto a maximum of 24 months
* Rescheduling of instalments and extension of tenure by a period equivalent to the moratorium granted subject to a maximum of 2 years
Documents to be submitted
Copies of the following documents need to be uploaded at the time of application (if applying online) or submitted along with the application form at the home branch.
* Salary slips for the month of February 2020 and current/latest salary slip
* A declaration of estimated salary/income immediately after the end of the desired moratorium period (Maximum 24 months)
* Letter of discharge from job (in case of job loss)
* Account statements of the account where salary is credited in case of salaried employees or statement of Operating Account in case of businessmen/self employed/professionals for the period Feb 2020 till 15 days prior to submission of application
* Declaration by self-employed professionals/ businessmen declaring that their business is affected by Covid-19
Change in pricing of loan
Borrowers will be required to pay additional interest of 0.35 per cent per annum over and above the
current pricing for remaining tenure of the loan, in order to offset partial cost of additional provisions required to be made by the bank.
Last date to apply
The last date to apply for relief under the framework is December 24, 2020.