After SBI, HDFC Bank issues restructuring guidelines for retail loans

• HDFC Bank will only consider retail loans with a minimum outstanding of ₹25,000 for one-time structuring.
  
• Defaulters will have to prove a dip in their income during the COVID-19 months.
  
• Here’s how you can check your eligibility and apply for HDFC Bank’s retail loan restructuring.
  

After the State Bank of India (SBI) revealed its terms and conditions for retail loan structuring, India’s largest private sector bank has also come forward with its guidelines. HDFC Bank has set a minimum outstanding limit at ₹25,000 for restructuring retail loans.

As per the Reserve Bank of India’s (RBI) notice, only loans that had begun to default after 1 March 2020 will be eligible for the scheme. Just as with SBI, applicants will be reviewed based on documents and information provided — like the customer’s repayment track record, responses given while claiming moratorium, and other insights.

Both banks are also offering to extend the balance tenure of the loan by a maximum of 24 months.

The aim is to ascertain a drop in cash flow during the COVID-19 months. If that is the case, HDFC Bank will then ‘assess the viability’ of the customer to pay the restricted EMIs before final approval can go through.

How to apply for HDFC Bank’s retail loan restructuring

• Visit the bank’s official website or get in touch with your relationship manager to file an application.
• Salaried customers will need to provide salary slips or bank statements as proof of employment
• Self-employed individuals will need to provide GST, income tax returns, and Udyam certificate.
  

Once the loan is restructured, it will be reported as such to the credit bureau. While HDFC Bank has not specified any increase in interest as a result of the reclassification but did say, “The bank may levy a fee if you choose to restructure your loan.”

SBI customers will have to pay an additional 0.35% interest annually.

Loans not eligible for restructuring at HDFC Bank:

• Loans 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

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