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<ul><li>The Reserve Bank of India (RBI) is looking at the one-time restructuring of all loans, which includes personal loans as well. </li><li>Provided you didn’t default on your loans as of 1 March 2020, you can apply to change the payment plan on your loan. </li><li>RBI has set a deadline of 1 December 2020 for all restructuring requests to be put into play and implemented within 90 days of being invoked. </li></ul>Car loans, home loans, or any kind of personal loan that you couldn’t make the payments on are now eligible for restructuring. The Reserve Bank of India (RBI) announced that it will open up a window for a one-time <keyword id="444301" type="PERSON" weightage="20" keywordseo="restructuring-of-loans">restructuring of loans</keyword> — all loans — that were impacted by COVID 19. <div type="image" title="Overall exoposure" msid="77392046" hostid="261" caption="&amp;lt;p&amp;gt;Loans under moratorium with banks across India as a percentage of total outstanding loans &amp;lt;/p&amp;gt;"></div> This means that you’re struggling to pay off your personal loans, you can ask the bank to modify the terms of repayment, get additional credit to rebuild or even extend the moratorium period. The minimum credit requirement is that you should not have defaulted on your loan payments as of 1 March 2020 or within 30 days of that day. The outstanding amount of debt at that point of time will be considered for restructuring. You have till 31 December to push for a new payment plan As per the RBI’s circular, resolution under the new mechanism has to be invoked by 31 December 2020. Once invoked, it must be implemented within 90 days. However, RBI suggests that banks and other lending institutions should try and kick off their plans earlier than the due dates. The resolution could include the following features: <ul><li>Rescheduling of payments </li><li>Conversion of interest accrued into another credit facility </li><li>Granting of moratorium </li><li>Modification of overall tenor of the loan </li></ul>The terms and conditions of how this will be determined depending on your projected income streams over the next two years. Provided the restructuring plan is put in place within the stipulated timeline, then your loan will not be classified as a non-performing asset (NPA). However, if that is not the case then rating of the loan will be done as per the borrower’s actual performance. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbi-brings-in-kv-kamath-to-set-the-boundaries-for-a-one-time-restructuring-of-these-loans/articleshow/77388568.cms">RBI brings in KV Kamath to set the boundaries for a one-time restructuring of loans</a> <a href="https://www.businessinsider.in/finance/news/rbi-governor-shaktikanta-das-leaves-repo-rate-unchanged-to-check-inflation/articleshow/77387591.cms">‘Watchful’ RBI leaves repo rate unchanged to keep inflation in check</a> <a href="https://www.businessinsider.in/finance/news/rbi-has-opened-a-pipeline-of-funds-for-startups-home-buyers-and-green-power-producers-too/articleshow/77388903.cms">RBI has opened a pipeline of funds for startups, home buyers and green power producers too</a>

If you have a bank loan that you are unable to pay, restructuring is on its way

<ul><li>The Reserve Bank of India’s (RBI) Monetary Policy Meeting (MPC) is currently underway and it has some tough decisions to make.</li><li>It needs to decide between meeting its inflation-targeting mandate and making sure there’s still liquidity in the market. </li><li>The RBI also needs to figure out where another moratorium or a one-time restructuring of loans across all sectors will be better for businesses.</li></ul>The Reserve Bank of India (RBI) is set to announce its policy rate decision tomorrow, and this time around, the situation is more uncertain than usual. From meeting its inflation mandate to keeping money circulating in the economy to dealing with loans — RBI’s policy decision could set the tone for how the apex bank expects the next few months to go. The moratorium conundrum Many banks and industry experts are of the opinion that another moratorium on loan repayments is not required going forward. The RBI first announced a three-month moratorium from March to May then extended the limit to August 31 leading to a lot of uncertainty when it comes to a bank’s balance sheets. Private and public sector banks alike have been shoring up provisions to deal specifically with COVID related accounts, over and above the RBI’s mandate. <div type="image" title="Provisions in Q1" msid="77365771" hostid="261" caption="&amp;lt;p&amp;gt;Provisions across major Indian banks in Q1&amp;lt;/p&amp;gt;"></div> SBI chairman Rajnish Kumar told the <a href="https://economictimes.indiatimes.com/news/economy/policy/government-and-corporates-need-to-invest-more-for-recovery-sbi-chairman-rajnish-kumar/articleshow/77358404.cms">Economic Times</a> that the moratorium has achieved its limited purpose and can now be done away with. “What the RBI can do is if the bank is satisfied with the intent of the borrower and normalisation in cash flows, it can give some relief,” he said. The call for one-time restructuring Rather than delay payments further, Indian industry leaders are suggesting that a one-time restructuring of all loans should be put on the table. Certain segments were already struggling before the coronavirus pandemic hit and others are wondering how to crack the ‘new normal’. <div type="Article" hostid="261" msid="77328145" title="One-time loan restructuring dilemma - RBI won’t commit, and India Inc won’t stop asking for it" mstype="2" mssubtype="0"></div> The RBI’s issue with restructuring loans has always been that it amounts to ‘deceptive banks’ — in the words of the former RBI governor Raghuram Rajan. Businesses, on the other hand, don’t want to be declared NPA in order to be restructured since that blocks incremental funding. For any of this to happen, banks need to be incentivized to pump more money into loans on the verge of collapse. RBI’s inflation-targeting mandate Former RBI Deputy Governor Viral Acharya <a href="https://www.moneycontrol.com/news/trends/current-affairs-trends/focus-on-inflation-over-growth-at-next-policy-review-meet-viral-acharya-to-rbi-5631091.html">believes</a> that the apex bank should ‘respect’ its core mandate and get inflation in India under control. But, it’s not a simple choice because of the relationship inflation shares with the repo rate. The RBI has slashed the repo rate twice in the last 4 months — once during the March MPC by 75 basis points (bps) and again in an off-cycle meeting in May by another 40 bps. 100 bps make up one percent and the repo rate is one of the instruments that the RBI has on hand to control inflation and spur growth. The rate currently stands at 4%. The repo rate and inflation share an inverse relationship. While dipping the repo rate further could make inflation worse, increasing it would make it more expensive for banks to borrow. The RBI is required to keep inflation in India between 2% to 6% as per its inflation targeting mechanism — or core mandate as Acharya put it. In the last six months, the RBI has missed its range exceeding 6% inflation each quarter. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Month </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rate of Inflation </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Quarterly average </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.59% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Feb </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.58% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.84% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.67% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">April </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.22% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">May </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.27% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">June </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.09% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.51% </td></tr></tbody></table> If the RBI fails to keep inflation within tolerance levels this quarter as well, it will technically constitute a failure of the monetary policy. Following which, RBI will be required to send a report to the central government explaining why the situation occurred and the remedial measures to fix it. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/axis-bank-finalises-10000-crore-share-sale-to-raise-funds-at-a-floor-price-of-442-19/articleshow/77354177.cms">Axis Bank finalises ₹10,000 crore share sale to raise funds at a floor price of ₹442.19</a> <a href="https://www.businessinsider.in/finance/banks/news/one-time-loan-restructuring-dilemma-rbi-wont-commit-and-india-inc-wont-stop-asking-for-it/articleshow/77328145.cms">One-time loan restructuring dilemma - RBI won’t commit, and India Inc won’t stop asking for it</a> <a href="https://www.businessinsider.in/finance/news/depressions-and-recessions-differ-in-their-severity-duration-and-overall-impact-heres-what-you-need-to-know-/articleshow/77289455.cms">Depressions and recessions differ in their severity, duration, and overall impact. Here's what you need to know.</a>

Three things the RBI will have to mull over as it gets ready to announce its monetary policy decision

Kolkata, May 7 () Srei Infrastructure Financechairman Hemant Kanoria on Thursday welcomed SBI's decision toextend moratorium to NBFCs, but said the need is of one-timerestructuring of loans.State Bank of India (SBI), the country's largestlender, has decided to extend the RBI-approved moratorium tothe cash-strapped NBFC sector to help them tide over thecrisis.The RBI has allowed banks to extend moratorium toborrowers of term loans of all kinds for three months --March, April and May."Three months moratorium is not going to help as itwill end in May and economic activity is yet to pick up in thecountry," Kanoria told ."What we basically need is that there should be one-time restructuring of loans of all the borrowers, includingNBFCs, based on their future cash flow," he added.SBI would extend the moratorium to the Non-BankingFinancial Companies (NBFCs) on a case-to-case basisafter assessing their cash budgets and examining the need forextending it. dcSOM SOM

One-time restructuring of loans needed: Srei chief on SBI's moratorium offer

<ul><li>The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword>’s (RBI) <keyword id="9861168" type="UNKNOWN" weightage="20" keywordseo="six-month-moratorium">six-month moratorium</keyword> came to an end on August 31, and payments are set to come due, starting today.</li><li>The Supreme Court is yet to announce its verdict on whether the interest accrued during that time will be waived, leaving many borrowers wondering what they should do. </li><li>Those who aren’t in a position to make payments, waiver or not, have the option to go for a one-time restructuring of loans.</li></ul>The Reserve Bank of India’s (RBI) pause on repayment of interest on loans for the past six months came to an end yesterday, August 31. Even though the government is yet to take a stand on whether or not the interest accrued during the moratorium period will be waived off, the payments for borrowers are going to start coming due from today. <div type="Article" hostid="261" msid="77758597" title="Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived" mstype="2" mssubtype="0"></div> As a borrower, you fit into one of three categories: <ol><li>Someone who didn’t avail the moratorium</li><li>Someone who availed the moratorium and is still facing financial difficulties</li><li>Someone who availed the moratorium but only for the sake of keeping liquidity on hand</li></ol>Someone who didn’t avail the moratorium If you’re a borrower that did not avail the moratorium facility offered by the RBI over the last six months, nothing changes. Your monthly payments continue as is, and there is no change in your overall loan payments scheme. Someone who availed the moratorium but can afford to pay Not everyone who availed the moratorium was facing a financial crisis. Someone did it to ensure that there was some extra cash on hand in case things took a turn for the worse. Even with the matter of interest waiver pending with the Supreme Court, banks are likely to recommend a one-time payment rather than letting interest accrue further. According to the RBI, an interest waiver could lead to a loss of ₹2 lakh crore for banks in India. “If you have taken a moratorium, the bank will suggest depositing as much amount as you can,” a bank manager at one of India’s leading public sector banks told Business Insider. According to them, even if the Supreme Court decides to waive interest, the amount will go towards advance loan paid. Someone who availed the moratorium and is still facing financial difficulties Not every business has been impacted equally during the coronavirus lockdown — some have taken a bigger hit than others. Take the tourism industry as an example. India’s gross domestic product (<a href="https://www.businessinsider.in/policy/economy/news/indian-economy-contracts-23-9-in-the-april-june-quarter/articleshow/77854401.cms">GDP</a>) data released yesterday shows how the trade, hotels, transport &amp; communications showed the biggest dip in real gross value addition (GVA). So, if you’re one of the many who is still not in a position to make payments, you have the option to approach your bank to restructure your loan. This could mean smaller payments over a longer period, an extension of the moratorium, or relaxation of interest rates. “We look at restructuring of loans as a last resort. It’s only for customers you really need it, and there are no other options left to explore,” said the source. <div type="Article" hostid="261" msid="77391894" title="If you have a bank loan that you are unable to pay, restructuring is on its way" mstype="2" mssubtype="0"></div> All types of loans, whether its a personal loan or a corporate loan, can apply for restructuring provided they meet the RBI's eligibility requirements — like you should not have defaulted on your loan payments as of 1 March 2020 or within 30 days of that day. The outstanding amount of debt at that point of time will be considered for restructuring. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/loan-moratorium-still-ends-on-aug-31-while-supreme-court-gives-the-government-another-week-to-clarify-if-accrued-interest-should-be-waived/articleshow/77758597.cms">Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived</a> <a href="https://www.businessinsider.in/tech/enterprise/news/rise-in-work-from-anywhere-will-lead-to-more-outsourcing-thats-an-opportunity-for-tcs-infosys-and-hcl-tech/articleshow/77864248.cms">Rise in 'work from anywhere' will lead to more outsourcing — that's an opportunity for TCS, Infosys and HCL Tech</a> <a href="https://www.businessinsider.in/stock-market/markets/news/dollar-index-is-at-a-two-year-low-and-heres-how-much-it-may-hurt-tcs-infosys-hcl-tech-and-others-if-it-stays-weak/articleshow/77843868.cms">Dollar Index is at a two-year low⁠ and here’s how much it may hurt TCS, Infosys, HCL Tech and others if it stays weak</a>

You Searched For "moratorium loan restructuring" and got 4 results

If you have a bank loan that you are unable to pay, restructuring is on its way

Prabhjote Gill

Three things the RBI will have to mull over as it gets ready to announce its monetary policy decision

Prabhjote Gill

One-time restructuring of loans needed: Srei chief on SBI's moratorium offer

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Loan repayments will become due starting today — here are the options that borrowers have

Prabhjote Gill

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