Financial Affairs

HDFC Bank loan restructuring: who can benefit from the program, required documents, impact on credit report

According to the Reserve Bank of India (RBI), after the expiration on August 31, 2020, of the general moratorium on loans offered to borrowers of a bank, banks were required to offer new restructuring options for these loans to banks. borrowers and establish their own terms and conditions for the same. Following this, HDFC Bank has published its own set of terms and conditions / eligibility rules / loan restructuring process on its website.

In accordance with the FAQ on Continuing Loan Restructuring (After RBI-Mandated Moratorium Ends) posted by the bank on its website, individuals can apply for loan restructuring regardless of whether they have opted for a moratorium of six months between March 2020 and August 2020 or not. In addition, the loan once restructured will be classified as “Restructured” on the borrower’s credit report. The bank may charge a commission on loan restructuring. In addition, the minimum outstanding balance required to convert dues / credit card loans is Rs. 25,000.

Here are the detailed loan restructuring application rules put in FAQ form by HDFC bank. These apply to the restructuring of personal loans such as home loans, car loans, credit card dues, etc.

  1. What is the restructuring plan approved by RBI?
    The RBI has provided a framework for banks and lending institutions to implement resolution plans to deal with the economic fallout from the COVID-19 pandemic which has caused significant financial stress for customers. On the basis of the regulatory framework and directives, your bank has defined its policy for restructuring the loan (s) of natural and legal persons impacted by the COVID-19 pandemic.
  2. Who is eligible for restructuring?
    a) Individuals and entities that are classified as standard, but not in default for more than 30 days with the bank as of March 1, 2020, and continue to remain as standard for all of its loans / facilities to date are eligible for the restructuring. b) The client must be impacted financially by the COVID-19 pandemic in the form of reduction / loss of income or cash flow. c) The reduction in revenue and its financial impact on the customer will be reviewed by the bank based on the documents / information provided which show the decrease in cash flow due to the impact of COVID-19. The bank will assess the viability of the customer to pay the restructured EMIs on the basis of the documents provided, before granting the restructuring. In addition to the viability calculations, the customer’s repayment history and the responses given by the customer while taking advantage of the moratorium earlier will also be factored into the restructuring decision.
  3. How can I take advantage of the restructuring benefit on my loan?
    You can visit the bank’s website for the request link to complete the request form and submit the relevant details. Alternatively, you can contact your RM. The application link will be updated shortly.
  4. What are the restructuring options available to me?
    The loan balance term can be extended for a further period of up to 24 months to ease your monthly EMI repayment charge.
  5. Do I have to present documents to benefit from the restructuring allowance?
    The bank will ask you to submit documents giving details about the current state of your job or business. For salaried borrowers – payslips and a bank statement may be required. For independent borrowers / 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 request link which will be updated shortly.
  6. Will opting for the restructuring package have an impact on my credit bureau report?
    In accordance with regulatory guidelines, your loan / credit facility 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 the credit bureaus and therefore all borrower’s facilities / loans with the bank will be classified and reported as “restructured” even whether the borrower has undertaken a restructuring. for a single loan.
  7. Will there be any processing fees or charges if I restructure my loan?
    The bank may charge a fee if you choose to restructure your loan.
  8. I have several loans / credit facilities with the bank. Do I have to apply separately for each of these loans?
    The restructuring request form will have the option of requesting one or all of the loans with a single request on the bank’s website. The bank will assess the application of regulatory guidelines on the impact of COVID-19 and the viability of the repayment plan before making its decision.
  9. I have a credit card with EMI plans within my credit limit. Can I opt for a restructuring of the card outstanding only and not of the EMI plans?
    The entire credit card balance, including loans within the credit limit, will be restructured and converted to a separate loan account.
  10. I have a Jumbo loan facility on my credit card. Is it mandatory to convert the Jumbo Loan if I choose to restructure the credit card?
    You can choose to restructure either the card balance, the Jumbo loan, or both.
  11. Is there an outstanding minimum requirement to benefit from the restructuring facility?
    The minimum balance required to convert the outstanding card / loan is Rs. 25,000.
  12. I am a self-employed person / an entity having my small unit. Am I eligible for relief?
    Individuals / independent entities falling under the MSME category in accordance with the revised guidelines for the classification of MSMEs put in place by the Government of India, can apply for relief under the MSME restructuring program. Please contact your RM for details. The Bank would require its independent clients to register as MSMEs through the government’s Udyam portal, if applicable. Udyam portal link: inscription-en-ligne.htm
  13. Can I ask for a restructuring now because I could not ask for a moratorium before?
    The restructuring regime is open to all of the bank’s customers regardless of the moratorium status applied, provided that the borrower complies with regulatory restructuring guidelines.
  14. What types of loans are not eligible for restructuring?
    a) Loans to individuals / entities for agricultural purposes and classified as agricultural loans by the bank b) Agricultural credit companies c) Financial service providers d) Central, state and local government agencies e) HDFC bank employees f) Exposures to Housing finance companies that have already been rescheduled Loans granted for commercial purposes will be eligible for relief under the MSME guidelines, as explained in point 12 above.
  15. My loan was taken out with a co-borrower (s). Will all co-borrowers of the original loan agreement be required to sign the revised restructuring agreement?
    In accordance with regulatory and legal requirements, all borrowers / co-borrowers of the original loan must accept and sign any change in the structure of the loan, including the restructuring agreement.

According to the bank’s website, in case of additional questions, customers can contact as follows:

Business and SME customers – Please contact your account manager
Retail Customers – Please write to us at [email protected]