In a bid to provide relief to the common man and businesses who have been by the COVID-19 crisis, State Bank of India is set to/ provide relief to home and retain loan borrowers in the form of either a moratorium of up to 2 years or by rescheduling instalments and extending the tenure by a period equivalent to the moratorium granted.
The country’s largest lender said on Monday that the moratorium cab be extended by a maximum of 2 years, setting the tone for other banks. It also said it has launched a facility on its website to help retail customers check their eligibility for one-time loan restructuring announced by the RBI.
Last month, the Reserve Bank of India (RBI) had announced a one-time restructuring scheme for personal loan and corporate borrowers affected by COVID-19 stress.
“We thought instead of people actually visiting our branches, we can provide this tool and they can initially check their eligibility,” the bank’s managing director (retail & digital banking) C S Setty told reporters.
The scheme will be available for borrowers who had availed of a home loan before March 1, 2020 and were regular in payments until the coronavirus-induced lockdown.
However, the borrowers will have to provide proof that their income has been hit due to the pandemic.
Setty said that an eligible customer will have to later visit the bank’s branch for completion of other formalities such as signing of papers and others.
The bank’s retail customer will be asked to fill their account number on the relevant segment on the bank’s website. After completion of OTP validation and keying in the requisite information, customers will get to know their eligibility and receive a reference number.
This reference number will be valid for 30 days and within which time customers can visit the branch to complete the required formalities. The restructuring process will be complete after verification of documents and execution of simple documents at branch/CPC, the lender said.
“We would like to address those who had temporary job loss and are likely to come back, maybe after 6, 8, 9, 12 months or up to 24 months. We are completely relying upon his own assessment because when he will get the job, it’s not in our hands,” Setty said.
According to the Frequently Asked Questions (FAQs) put out by the bank on its website, a retail borrower who avails restructuring will be required to pay additional interest of 0.35 per cent per annum for the remaining tenure of the loan.
As of now, around 3,500 retail customers of the bank have accessed the portal and out of them 111 are eligible who have got the reference number generated, he said.
According to the RBI’s Resolution Framework for COVID-19-related Stress, only those retail borrower accounts shall be eligible for resolution which were standard, but not in default for more than 30 days as on March 1, 2020.
Resolution under this framework may be invoked not later than December 31, 2020 and must be implemented within 90 days from the date of invocation.