HDFC Loan Restructuring

RBI Resolution Framework

The Covid-19 pandemic has resulted in significant financial stress across the nation and we, at HDFC, continue to find ways that would provide support to our customers, who have been financially impacted by the pandemic, in these unprecedented times. As you may be aware, HDFC has, in consonance with regulatory permits, offered our customers the choice to opt for an EMI/instalment moratorium till August 31, 2020 based on the directions and notifications issued by the Reserve Bank of India (“RBI”) from time to time.

As a part of the governments continued efforts to combat the economic and financial stress caused due to COVID-19 pandemic, the RBI has further released its circular no. RBI/2020-21/16 DOR.No.BP.BC/3/21.04.048/2020/21, dated August 6, 2020 (“the Circular”), wherein the RBI has provided the scope for adopting a resolution framework within the contours of the guidelines. This Circular enables lending institutions to consider the implementation of certain resolution plans that may help to address the financial stress caused to some borrowers during the COVID-19 pandemic. The resolution framework permits the lending institutions to re-assess the repayment capabilities of their borrowers, and provide rescheduled terms to such existing loans which fall within the eligibility criteria of the Circular and approved lender policies.

In order to give effect to the above, HDFC is in the process of offering a well-formulated restructuring mechanism to its eligible borrowers, who are facing financial stress on account of the Covid-19. These include well defined parameters for re-assessment, adequate documentation to effectuate the restructuring (as per the Circular) and a smooth process to transition our eligible customers from their existing terms of repayment to a rescheduled one.

In consonance with the regulatory framework and guidelines as provided by the RBI under the Circular and to facilitate our customers through this journey, we provide below certain Frequently Asked Questions (FAQs) to further answer any queries that our customers may have towards this purpose.

For inquires related to restructuring, please write to us at [email protected] from your email ID as previously shared by you with HDFC. Kindly mention your loan account no. in the subject line of the mail.

FAQs

1. What is the restructuring scheme announced by RBI?

RBI has announced the restructuring scheme as per its Circular dated August 6, 2020 to address the financial stress arisen out COVID -19 pandemic. Restructuring scheme can be offered to customers whose repayment is impacted due to COVID-19 crisis based on assessment of stress by HDFC and the viability of resolution plan.

2. What are the eligibility criteria for a retail borrower to avail loan restructuring?

The following are the eligibility criterion for considering an account for restructuring:

  • Borrowers whose accounts are classified as “Standard”, and not in default for more than 30 days with HDFC as on March 1, 2020 and continue to remain standard across all its loans till the date of invocation of the resolution plan i.e., the date on which both the borrower and HDFC have agreed in writing to proceed with a terms of the resolution plan. Until such time the restructured terms are implemented by HDFC, the borrower shall be required to continue to honour his/her obligations towards payment of PEMI/ EMI/Instalments as per the terms and conditions of the main Loan Agreement.
  • Borrowers who fall in the above category and are facing loss of jobs/reduction in income due to COVID 19 pandemic, as per the assessment of HDFC, may be considered eligible for further reassessment under the resolution framework.

3. Do I need to submit any documents to avail of the restructuring benefit?

Borrowers shall be required to submit their request for resolution plan for restructuring (in the prescribed format) with HDFC along with relevant documents (as may be required by HDFC) in support of their request for restructuring, for HDFC to assess the impact of COVID-19 on income/cash flows of the borrowers and decide on the viability of the restructured terms of the loan.

Implementation of the resolution plan for restructuring in respect of the loan account shall be at the sole discretion of HDFC and subject to the terms and conditions of the Circular and the Board Approved Policy.

4. How can I request HDFC to restructure my loan?

For inquires related to restructuring, please write to us at [email protected] from your email ID as previously shared by you with HDFC. Kindly mention your loan account no. in the subject line of the mail.

5. Are there any additional costs or charges if I restructure my loan?

HDFC may levy a processing fee and charge a higher rate of interest as may be applicable should the borrower choose to restructure his/her loan.

6. Will opting for the restructuring package have an impact on my credit bureau report?

As per the Circular, the borrower’s loan will be reported to the credit bureau as “Restructured” and the credit history of the borrowers shall consequently be governed by the respective policies of the credit information companies as applicable to accounts that are restructured.

7. I hold multiple home loans with HDFC. Do I have to apply separately for each of these loans?

Yes, the borrowers shall have the option to apply for a resolution plan for restructuring all the loans with HDFC. HDFC shall assess the application of the resolution plan for restructuring of all the loans in respect of each of the loan accounts and the implementation of the resolution plan shall be at the sole discretion of HDFC, subject to the terms and conditions of the said RBI Circular and the Board Approved Policy.

8. Can I apply for restructuring now as I was not able to apply for moratorium before?

The scheme for restructuring is open to all borrowers/customers of HDFC irrespective of the moratorium applied status subject to the borrower meeting the regulatory guidelines on restructuring under the Circular and the terms and conditions of eligibility under the Board Approved Policy.

9. My loan was taken along with a co-borrower/s. Will all the co-borrowers of the original Loan Agreement be required to sign the revised restructuring agreement?

As per regulatory and legal requirements, all borrowers/co-borrowers of the main loan need to agree and sign on any changes in the loan structure including the restructuring agreement along with such other documents as may be required by HDFC for implementing the resolution plan.

10. What are the restructuring options that are available to me?

The residual tenor of the loan may be extended with or without payment moratorium, by a period not more than two years from the original term of the Loan.

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