Loan Restructuring

Loan Restructuring Policy

The pandemic due to COVID-19 outbreak in India and across Globe has caused widespread Economic challanges for Individuals, Bussinesses and Entities. Restructuring is an effort to, calibrate the said impact and provide a judicious credit solution to the borrowers, specially the one's who faced repayments stress after the outbreak.

K V Kamath committee worked on the impacts and have suggested that restructuring option be given to the Eligible Borrowers by way of policy approved by the Board of the respective Banks/ NBFCs/ FIs.


A borrower will be considered eligible under the restriction policy if following criteria's are met.
These conditions should be read together and not in isolation to check eligibility:

The Borrower should be less than 30 DPD as of 29th February, 2020.
Aggregate exposure of the borrower should be less than 25 Crores as of 01st January, 2020.
For MSME loans, the GST registration is mandatory unless proof of exemption is placed on record.
MSME entity has not already availed restructuring as per January 2019 RBI circular.
Balance Tenure should be greater than 3 months.

Restructuring Program

The restructure program has to be judicious to ensure that the borrowers with reduced capacity are supported and not the ones with intention issues. Following will remain as the Guiding principles for the restructuring program.

Restructuring has to be done only basis express request and consent by the Borrower.
An assessment of the borrower will be done through a Personal Discussion or a Video Personal Discussion, while corroborating the same with the collection feedback.
The Tenure can be extended by 24 months and maximum up to 48 months.
The restructure will be done on the existing Ziploan (ZL) ID, it will not be booked as a new Loan.
The customer will be required to choose from one of the following options to initiate the restructure:

Restructure Option:

Option Advance EMI Processing Fee (%age of POS)
Solution 1 3 EMIs 1%
Solution 1 2 EMIs 2%
Solution 1 1 EMI 3%

Restructuring Process

The request from the customers can come through the Customer Care or Collections team follow-up.
These requests will be handled by the respective Collection officer to obtain the necessary Consent form, Advance EMI and PF cheque.
The Consent will be handed over to the Sales/Credit team for assessment. The Sales/Credit team will conduct a PD or vPD as appropriate.
There will be no primary filters used for such cases such as Zipscore or CIBIL score.

Basis the discussion the credit team will either approve or decline the restructure. In case the case is approved following actions will be initiated:

  • A. Collection of Advance EMIs and the processing fee.
  • B. The tenure will be decided so that the EMI of the customer is largely between 50% -60% of original. The tenure cannot exceed 48 months.
  • C. The Operations team will restructure the ZL ID of the customer to the fresh tenure and resend the repayment schedule to the customer with the communication of restructure and obtain written confirmation on the same.
  • D. NACH maintenance will be reconfirmed to ensure that the revised tenure is covered in the NACH instruction, else fresh NACH will be obtained.


On every account restructured a provision of 10% will be created, though the Asset Classification for such cases will continue to be “Standard”. The provision will be marked against each account irrespective of the DPD.

In case, the account moves up in delinquency the provision will be held in addition to the provision being taken in regular course.


The account will be reported as restructured in the CIBIL reporting while maintaining the Asset classification as Standard at our end. Any DPD reporting will be done as per current process.