HDFC Bank loan restructuring process: Check out eligibility, documents, how to apply and other details

New Delhi: After the State Bank of India, the HDFC Bank has also released its policy for the restructuring of the loans of individuals and entities that have been impacted by the COVID-19 outbreak.

The HDFC bank says that 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 or facilities to date, shall be eligible for restructuring.

For a customer to avail the restructuring benefit loan, he/she may visit the HDFC website for the application link to fill the application form and submit the details. Alternatively, one may contact your RM. The link for the application will be updated shortly.

To avail of the restructuring option, the bank will ask its customers to submit documents giving details about the current status of your employment or business. For salaried borrowers - salary slips and bank statement may be required.

For self-employed borrowers or entities, bank statement, GST returns, Income tax returns, Udyam certificate, etc. may be required. One may visit the bank's website for the online restructuring application link which will be updated shortly.

The restructuring option will allow the balance tenure of the loan to be extended by a period of a maximum of 24 months, to ease the monthly EMI repayment burden.

For someone to avail the restructuring, he'she has to be impacted financially by the COVID-19 -- either in the form of reduction, or loss of income or cash flows.

The bank will review the same on the basis of the documents or information provided showing drop in cash flow due to the COVID-19 impact.

The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring.

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.

The restructuring application form shall have the option to apply for one or all the loans by a single application on the bank's website. The bank shall assess the application on regulatory guidelines on the COVID-19 impact and the viability of the repayment plan before decisioning the same.

As per regulatory guidelines, the loan or credit facility will be reported to the credit bureau as "Restructured".

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 or 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.

Self-employed individuals or entities falling under the MSME category as per the revised guidelines for MSME classification, can also apply for relief under the MSME restructuring scheme.

The Bank has urged its self-employed customers to register themselves as MSME through the Udyam portal of the Government wherever applicable.

In case a person has a credit card with EMI plans within the credit limit, the entire credit card balance including the loans within the credit limit will be restructured and converted into a separate loan account.

If one has a Jumbo Loan facility on the credit card, he/she may choose to restructure either the card balance or the Jumbo Loan or both the facilities to avail the restructuring.

It needs mention here that the minimum outstanding balance required to convert the card or loan outstanding is Rs. 25,000.

Categories of loans not eligible for restructuring: Loans to individuals or entities for agricultural purposes and classified as agricultural loans by the bank; agricultural credit societies; financial service providers; Central, State and local government bodies; HDFC Bank employees; Exposures to housing finance companies which have already been rescheduled.

The bank also said that loans given for commercial usage will be entitled to claim relief under the MSME guidelines.

It is pertinent to mention here that the Reserve Bank of India (RBI) allowed a moratorium of three months on payment of instalments of loans and later extended it by three months till 31 August, 2020. Once the moratorium period is over, the banks have been asked to offer restructuring options for these loans to borrowers. 

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