Business Desk, ETV Bharat: The country’s largest lender State Bank of India (SBI) on Monday issued detailed guidelines for its retail borrowers on the resolution framework for COVID-19-related stressed loans as mandated by the Reserve Bank of India (RBI).
The bank has launched an online portal for its customers where they can check their eligibility for loan restructuring and initiate the process as well.
If you are SBI’s retail borrower and want to opt for some repayment relief, here are some key details you should know:
Which loans are covered under SBI’s framework for distressed loans in personal segment?
Housing and other related loans, education loans, auto loans (other than loans for commercial use) and personal loans which existed in the bank’s books as on 1 March 2020 are eligible for consideration under the framework for distressed loans in the personal segment.
Which borrowers can apply for restructuring of loans?
Any SBI borrower who meets the following conditions can apply for restructuring:
-- The loan should be a ‘Standard Account’ as on the date of application for relief under this framework and should have been ‘standard’ and also not in default for more than 30 days as on 1 March 2020.
-- The borrower should have been affected by Covid-19 pandemic
How does the bank ascertain whether the borrower has been hit by Covid-19 pandemic?
For the borrower to prove that he has been financially hit by the pandemic, he/she needs to fulfil any one of the following conditions:
-- The borrower’s salary/income in August 2020 has got reduced when compared to February 2020
-- There has been a reduction/suspension in salary during lockdown period
-- Job loss/closure of business of the borrower
-- Closure during lockdown/reduced activity of units/shops/business establishments in case of self-employed/professionals/businessmen
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Is a borrower eligible for restructuring if his/her present income is not affected, but an income loss is expected in future?
No. The bank is only allowing restructuring for those who are already affected.
What kind of relief will eligible borrowers get?
Borrowers can request for a moratorium of 1-24 months. They can also ask for rescheduling of instalments and extension of loan tenure by a period equivalent to the moratorium granted subject to a maximum of 2 years.
Will the moratorium be in addition to the moratorium already granted by SBI earlier on account of Covid-19 related stress?
Yes, the moratorium sanctioned under this framework will be in addition to the moratorium granted by the bank earlier.
Will interest be applied during moratorium?
Yes. As per the current rules, the bank will apply interest on loans for the moratorium period as well.
Whether there will be any change in EMI?
Yes. On account of moratorium granted, the tenure of the loan will be extended by the period of moratorium and the EMI payable after the moratorium will be recalculated.
Will there be any change in pricing of the loan being restructured?
Yes, SBI says the borrower would be required to pay additional interest of 0.35% per annum over and above the current pricing for the remaining tenure of the loan, in order to offset partial cost of additional provisions required to be made by the bank.
Can the borrower avail additional loan facilities under the framework?
No. The borrower cannot avail additional loan under this particular framework.
How to apply for relief under SBI’s new framework?
The borrower can visit the official SBI portal -- https://bank.sbi/ or https://sbi.co.in – where he/she will be asked to submit their loan account number. Once submitted, an OTP verification will be done through the registered mobile number.
Then borrowers need to submit income details along with some key information inputs to know their eligibility. If eligible, the borrower will receive a reference number which will be valid for 30 days.
Within those 30 days, the borrower can visit the branch where his/her account is maintained to submit the required documents and formally complete the application process.
The approval of the application would be conveyed later to the borrower by the SBI branch after verification and execution of documents. SBI says it will endeavour to process the application within 7-10 working days of its submission.
Is the restructuring eligibility as reflected on the portal be considered as sanctioned by the bank?
No. The portal will reflect only ‘provisional eligibility’. The branch may request the borrower to submit any other documents for clarity. The decision conveyed by the branch will be final in regards to the borrower’s eligibility for being considered for relief under the framework.
Up to which date can the borrower apply for relief under the framework?
The last date to apply for relief under the framework is 24 December 2020.
