In what way has the Reserve Bank of India (RBI) helped the borrowers who are finding it difficult to repay the loan? debt restructuring.

In 2020, RBI had announced Loan restructuring program. And then in May 2021, due to the second wave of COVID-19, it announced a second resolution framework for multiple borrowers, including individual borrowers.

Various banks have announced the terms and conditions for availing their Debt Restructuring 2.0.

Have a look at the frequently asked questions here HDFC bankDebt Restructuring Policy 2.0 as per the website of the lender.

1. What is the Restructuring 2.0 plan approved by RBI?
   The RBI has provided a framework to banks and lending institutions for implementation of resolution plans to address the economic fallout due to the COVID-19 pandemic, which has led to significant financial stress for customers. Based on the framework and regulatory guidelines, your Bank has formulated its policy for restructuring of loans of individuals and entities that have been affected due to the COVID-19 pandemic.
2. Who is eligible for restructuring?
   a) Individuals and entities classified as standard with the Bank as on April 1, 2021. b) The customer is to be financially impacted by the COVID-19 pandemic in the form of loss/loss of income or cash flow. c) Only those accounts which are in the books of the bank as on 1st April, 2021 will be eligible. c) The reduction in earnings and its financial impact on the customer will be reviewed on the basis of documents/information provided by the Bank which shows the decline in cash flow due to COVID-19 impact. Before granting the restructuring, the bank will assess the viability of the customer to pay the restructured EMI based on the documents provided. Apart from the feasibility calculation, the repayment track record of the customer, credit bureau record, and responses given by the customer while availing the earlier moratorium will also be included in the restructuring decision.
3. Which products are covered under the regulatory restructuring relief package.
   * Credit Card Receivable* Auto loans and two wheeler loans * Personal loans (for personal use and for business/commercial purposes) * Personal loans to professionals * Education loans * Loans given for construction/enhancement of real estate (eg, housing loans)* Loan with MSME Enterprise Certificate (Borrower should be classified as MSME as on 31st March, 2021 as per Gazette Notification SO 2119(E) dated 26th June, 2020)
4. Which types of loans are not eligible for restructuring?
   Loans to the following entities/individuals are not eligible for restructuring:- * Individuals / entities for agricultural purposes and classified as agricultural credit by the bank * Agricultural credit societies * Financial service providers * Central, State and local government bodies * HDFC Bank Employees of * Exposure to housing finance companies that have already been rescheduled * Loans that have already been restructured once
5. How do I get the restructuring benefit on my loan?
   You can visit the bank’s website for the application link, fill the application form and submit the relevant details. Log in to the application form with your loan account number / credit card number / email ID registered with the bank and OTP sent to your registered mobile. number / email. If you have changed your number, please give a written request to the nearest branch to change the number, and apply after changing the number on the system. Alternatively, you can contact your Relationship Manager (RM).
6. Can I apply multiple times?
   No, you can apply for restructuring only once.
7. What restructuring options are available to me?
   The remaining tenure of the loan including the moratorium period can be extended for a maximum period of 24 months at the discretion of the bank to reduce your monthly EMI repayment burden.
8. Do I need to submit any document to avail the restructuring benefit?
   The bank will require you to submit documents giving details about your current state of employment or business. For Salaried borrowers:* Salary slip for the month of March 2021 and latest salary slip for last 2 months* Declaration of estimated salary/income immediately after the end of desired restructuring period (maximum 24 months).* Leave letter (In case of job loss)* Bank account details of salary crediting account from October 2020 till date in case of salaried employees For self-employed borrowers/entities:* Current/CC account from 1st April 2020 till date Bank Details * GST Return October-2020 till now * Income Tax Return for FY-19 and FY-20 and FY-21 (if filed) * Profit and Loss Statement / Balance Sheet for the last 2 years * Enterprise Certificate * Declaration by Self Employed Professionals / Businessmen declare that their business is affected by Covid-19. Please keep these documents ready before applying on the link, as incomplete applications are unlikely to be processed.
9. Will opting for the restructuring package affect my credit bureau report?
   As per regulatory guidelines, your loan/credit facility will be reported to the credit bureaus as “Restructured”.
10. I have several loans/loan facilities with the bank. Do I have to apply for each of these loans separately?
    The restructuring application form will have an option to apply for one or all the loans through a single application on the Bank’s website. The bank will assess the application on regulatory guidelines, COVID-19 impact and viability of the repayment plan before taking a decision on it.
11. I have a credit card with EMI schemes within my credit limit. Can I opt for restructuring only outstanding card and not EMI schemes?
    The entire credit card balance including the loan within the credit limit will be restructured and converted to a separate loan account.
12. I have jumbo loan facility on my credit card. Is it mandatory to convert the jumbo loan if I want to restructure the credit card?
    You can choose to either restructure the card balance or jumbo loan or both the facilities.
13. Will my credit card be blocked or deactivated if I avail the restructuring scheme?
    Your Credit Card will be deactivated without any further notice once the Bank has approved the restructuring for any of your Loans/Credit Cards. The Bank may choose to restore the new limit on the Card at its sole discretion after 12 months depending on the repayment behavior on the loan EMI.
14. Is there a minimum balance requirement for availing the restructuring facility?v
    The minimum balance required to convert the card/loan is Rs. 25,000.
15. I am self employed / organization of which I have my small scale unit. Am I eligible for relief?
    Self-employed individuals/entities are eligible for relief for both MSME category as well as non-MSME category. The Bank will request its self-employed customers to register themselves as MSMEs, wherever applicable, through the Udyam Portal of the Government. Enterprise Portal Link: https://udyamregistration.gov.in/Government-of-India/Ministry-of-MSME/online-registration.htm
16. Can I apply for reorganization now as I was not able to apply for moratorium earlier?
    The scheme of restructuring is open to all customers of the Bank, irrespective of the status of the moratorium in force, provided the borrower fulfills the regulatory guidelines for restructuring.
17. I have already taken advantage of the restructuring. Can I take advantage of this again?
    If you have already availed the benefit of restructuring, you are not eligible for restructuring under this scheme. However, if you have not availed the full benefit of the 24-month tenure extension in the previous scheme that ended on December 31, the bank may assess and provide relief to the extent of the overall tenure extension of 24 months.
18. My loan was taken with a co-borrower. Will all co-borrowers of the original loan agreement be required to sign a revised restructuring agreement?
    As per regulatory and legal requirements, all the borrowers/co-borrowers of the original loan are required to agree and sign any changes in the loan structure including the restructuring agreement.
19. What is the last date to apply through the portal.
    The link on the portal will be live till 20 September 2021 for customers with a single loan or overall exposure of less than 25 lakhs.
20. How long will it take for me to know the status of the restructuring application.
    The bank will process and inform the status of the application to the customers in 10 to 14 working days.
21. How do I get acceptance and communication for approval?
    The Bank will notify the status of the restructuring request through text message or email to the registered phone number or email address.
22. Will I need to do more documentation for the reorganization?
    For all loans, you will need to sign a restructuring agreement after the bank’s approval for the restructuring to take effect. If you are the sole borrower, the bank will provide a digital option for signing the contracts. If there are two or more applicants on the loan structure, all applicants must accept the terms by physically signing the application and the revised agreement, and submit this agreement to the nearest customer service desk. The customer will receive a copy of the revised terms and rectification schedule by their registered mail id/regular post.