As per RBI’s Resolution Framework 2.0, State Bank of India (SBI) is now offering borrowers who have been financially impacted by the COVID-19 pandemic option to restructure their personal loans. However, opting for the restructuring plan is optional and those who are able to continue paying their regular EMIs should do so in order to minimize interest charges and the impact on their credit score. Read on to know several key details relating to SBI Personal Loan restructuring including the relief offered, eligibility and documentation requirements, application process and so on.
What is Loan Restructuring?
The SBI COVID-19 loan restructuring, under RBI’s Resolution Framework 2.0, is designed to provide relief to borrowers whose financial situation has been adversely impacted by the resurgence of the COVID-19 pandemic. The relief offered to borrowers of personal loans through SBI loan restructuring may include the following:
- Moratorium of up to 24 months
- Extension of current loan tenure/rescheduling of EMIs for up to 24 months
This loan restructuring will also include recalculation of the EMI payout according to the type of relief obtained by the borrower.
Eligibility Criteria
The key eligibility criteria to avail SBI personal loan restructuring facility include the following:
- Borrower should have availed the loan before 1 April, 2021
- Borrower’s account should not be NPA or should be a “Standard Account” as on 31st March, 2021
- Borrower should have experienced stress on account of COVID-19 related issues. The borrower shall be considered affected by COVID-19 pandemic, if any of the following conditions are satisfied:
- Reduction in income or salary over February 2020 levels
- Business closure/job loss
- Salary suspension/reduction during the period of lockdown
- Closure during lockdown or reduction in activity of shops/units/business establishments in case of businessmen/self-employed/professionals
- No reduction in salary but self and/or family members affected by COVID and incurred substantial expenditure on treatment of COVID -19
- Borrower should not have availed moratorium under the earlier restructuring framework. However, in case the borrower had availed a moratorium under Restructuring Framework 1.0 for a period of less than 24 months, he/she can apply for moratorium extension up to a maximum period of 24 months.
Documents Required
In order to apply for SBI’s COVID-19 loan restructuring program the borrower is required to submit copies of the following documents either online or at the home branch/CPC:
Salaried Applicant:
- Income document/salary slips for February 2020
- Declaration of estimated salary/income at the end of moratorium period (max. 24 months)
- In case of job loss, letter of discharge/termination is required
- Bank account statement (salary account/operating account) for past 6 months as on date of application
- RTPCR reports/hospitalisation and other related medical bills (optional)
Businessman/Self-employed/Professional Applicant:
- Provisional Profit & Loss A/c as on February/March 2020
- Provisional Profit & Loss A/c as on date. In case of unavailability, the latest P&L will need to be computed on the basis of revenue and income statement of operating account
- Any other proof of reduction in income (if available)
- Bank account statement (operating account) for past 6 months from the date of submission of application
- RTPCR reports/hospitalisation and other related medical bills (optional)
- Declaration regarding adverse impact of COVID-19 pandemic on business (for businessman/ self-employed professionals)
In case of online application, the documents need to be uploaded on the SBI website, while self-attested paper documents need to be submitted when applying at the bank branch.
How to Apply
Those interested in opting for the loan restructuring framework offered by State Bank of India can apply in the following ways:
- Online application submitted through the SBI official website. The application shall be validated through an OTP which will be sent on your mobile number
- Offline application submitted at the SBI home branch along with the necessary documents
The application for SBI personal loan restructuring has to be submitted by 28th September, 2021.
FAQs
Q1. If I opt for personal loan restructuring, will there be a change in the pricing of my loan?
Yes, you will have to pay an additional interest of 0.35% p.a over and above your current interest rate to offset the partial cost of additional provisions required to be made by SBI. However, personal loan borrowers having a limit up to 10 lakh are not required to pay the additional interest.
Q2. How long will SBI take to process loan restructuring requests?
SBI will strive to process all restructuring requests within 5 workings of application submission.
Q3. Does SBI levy a processing fee for loan restructuring?
No processing fee is required to be paid.
Q4. Are there any additional documents that I need to provide once relief is sanctioned under this framework?
A duplicate Arrangement Letter giving the details of the relief sanctioned to you under the Framework and other terms and conditions will be issued to you. You will have to return the Arrangement Letter duly executed and signed by all the signatories to the loan and guarantors (in case any) as a token of having accepted the terms and conditions contained therein within 10 days.
You will also need to submit the revised SI/ ECS/ NACH mandate mentioning the new EMI.
Q5. Can I apply for restructuring of 2 or more loans?
Yes, you can apply for restructuring of more than one account.
Q6. My account was classified as standard on 31 March, 2021. However, it slipped to NPA on the date of application. Can I apply for restructuring?
Yes, you can apply for loan restructuring.
Q7. Is it possible to submit scanned copies of the necessary documents through authorised email when I apply for loan restructuring?
Yes, you can submit duly signed scanned copies of the necessary documents via email (registered in the CIF) to the concerned CPC/ branches for processing.
However, in case invocation/ approval of the restructuring request, exchange of Arrangement letter and submission of revised NACH/ SI mandate etc. needs to be executed at CPC/ branch or as the process adopted for normal documentation of loan agreements.
Q8. Can I get additional credit/ loan facilities under the Framework?
No, you cannot avail additional credit under the Framework.
