In order to be eligible to have their loans recast, retail borrowers must have at least Rs 25,000 in outstanding.
For credit cards, the entire balance, including the loans within the credit limit, will be restructured and converted into a separate loan account.
In a series of frequently asked questions (FAQs) on the central bank’s restructuring scheme, HDFC Bank has said that it will report retail loan accounts that avail of the scheme as ‘restructured’ to credit bureaus. In order to be eligible to have their loans recast, retail borrowers must have at least Rs 25,000 in outstanding.
“As per regulatory guidelines, your loan/credit facility will be reported to the credit bureau as “Restructured”,” HDFC Bank said in the FAQs, adding, “Please note that as per regulatory guidelines, restructuring has to be reported at a borrower level to the credit bureaus and hence all the facilities/loans of the borrower with the bank will be classified and reported as “Restructured” even if the borrower has taken restructuring for only one loan.” The bank may levy a fee if a borrower chooses to restructure their loan.
Individuals and entities that are classified as standard, but not in default for more than 30 days with the bank as on March 1, 2020 and continue to remain as standard across all its loans and facilities till date will be eligible for restructuring. The customer has to be impacted financially by the Covid-19 pandemic in the form of reduction/ loss of income or cash flows.
The reduction of income and its financial impact on the customer will be reviewed by HDFC Bank on the basis of documents/information showing the drop in cash flow due to the pandemic.
“The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring,” HDFC Bank said. Apart from the viability calculations, the repayment track record of the customer, and the responses given by the customer while availing moratorium earlier will also be factored in the restructuring decision.
The scheme for restructuring is open to all customers of the bank, irrespective of the moratorium applied status, subject to the borrower meeting the regulatory guidelines of restructuring. All borrowers/co-borrowers of the original loan will need to agree and sign on any changes in the loan structure, including the restructuring agreement. For credit cards, the entire balance, including the loans within the credit limit, will be restructured and converted into a separate loan account.