HDFC Bank loan restructuring: Who is eligible, how to apply, what's the fee

To be eligible, the customer has to be impacted financially by the Covid-19 pandemic in the form of reduction/ loss of income or cash flows
HDFC Bank has put out on its website eligibility rules for loan restructuring, explaining what the scheme is and how to use it.

The Reserve Bank of India (RBI) in March allowed a moratorium of three months on payment of instalments of loans and later extended it by three months till August 31. When the moratorium period is over, banks had to offer restructuring options for these loans to borrowers. The RBI has permitted the banks to set their own terms and conditions for restructuring of loans.

Here are key details about HDFC’s loan restructuring offer as published on its website:

1. What is the restructuring scheme approved by RBI?

RBI has provided a framework to banks & lending institutions for implementation of resolution plans for addressing the economic fallout due to the Covid-19 pandemic which has led to significant financial stress for customers. Basis the framework and regulatory guidelines, your bank has framed its policy for the restructuring of the loan/s of individuals and entities that have been impacted due to the Covid-19 pandemic

2. Who is eligible for restructuring?

a) Individuals and Entities that are classified as Standard, but not in default for more than 30 days with the bank as on March 1, 2020 and continue to remain as standard across all its loans/facilities till date are eligible for restructuring. 

b) The customer has to be impacted financially by the Covid-19 pandemic in the form of reduction/ loss of income or cash flows. 

c) The reduction of income and its financial impact on the customer will be reviewed by the bank basis the documents / information provided which does show the drop in cash flow due to the Covid-19 impact. The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring. Apart from the viability calculations, the repayment track record of the customer, and the responses given by the customer while availing moratorium earlier will also be factored in the restructuring decision.

3. How do I avail the restructuring benefit on my loan?

You may visit the bank’s website for the application link to fill the application form and submit the relevant details. Alternatively, you may contact your RM. The link for application will be updated shortly.

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

The balance tenure of the loan can be extended by a further period of a maximum of 24 months to ease your monthly EMI repayment burden.

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

The bank will require you to submit documents giving details about the current status of your employment or business. For salaried borrowers - salary slips and bank statement may be required. For self-employed borrowers/ entities - Bank statement, GST returns, Income tax returns, Udyam certificate, etc. may be required. You may visit the bank’s website for the online restructuring application link which will be updated shortly. 

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

As per regulatory guidelines, your loan/credit facility will be reported to the credit bureau as “Restructured”. 
Please note that as per regulatory guidelines, restructuring has to be reported at a borrower level to the credit bureaus and hence all the facilities / loans of the borrower with the bank will be classified and reported as “Restructured” even if the borrower has taken restructuring for only one loan. 

7. Will there be any processing fees or charges if I restructure my loan?

The bank may levy a fee if you choose to restructure your loan.

8. I hold multiple loans/credit facilities with the bank. Do I have to apply separately for each of these loans? 

The restructuring application form shall have the option to apply for one or all the loans by a single application on the bank’s website. The bank shall assess the application on regulatory guidelines on the Covid-19 impact and the viability of the repayment plan before decisioning the same. 

9. I have a credit card with EMI plans within my credit limit. Can I opt for restructuring of only the card outstanding and not the EMI plans?

The entire credit card balance including the loans within the credit limit will be restructured and converted into a separate loan account

10. I have a Jumbo Loan facility on my credit card. Is it mandatory to convert the Jumbo Loan if I choose to restructure the credit card? 

You may choose to restructure either the card balance or the Jumbo Loan or both the facilities. 

11. Is there a minimum outstanding requirement for availing the restructuring facility?

Minimum outstanding balance required to convert the card/loan outstanding is Rs. 25,000. 

12. I am self-employed/ entity having my small-scale unit. Am I eligible for relief?

Self-employed individuals/entities falling under the MSME category as per the revised guidelines for MSME classification rolled out by the Government of India, can apply for relief under the MSME restructuring scheme.  Please contact your RM for more details. The Bank would request its self-employed customers to register themselves as MSME through the Udyam portal of the Government wherever applicable.

Udyam portal can be visited here.

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

The scheme for restructuring is open to all customers of the bank irrespective of the moratorium applied status subject to the borrower meeting the regulatory guidelines of restructuring.

14. What type of loans are not eligible for restructuring?
  • Loans to individuals/entities for 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 
Loans given for commercial usage will be entitled to claim relief under the MSME guidelines as explained in point 12 above. 

15. 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 original loan need to agree and sign on any changes in the loan structure including the restructuring agreement.

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