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