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After the loan moratorium to the common people in the Corona crisis, preparations have been started to provide relief through debt restructuring. Several private and state-run banks, including the State Bank of India, have begun work on the framework for restructuring home loans. According to sources, the KV Kamath committee will not focus on retail. Banks have to prepare their own proposal to restructure retail debt.

According to banking sources, in the option that banks are considering, lenders can choose to close the home loan EMI for a few months or reduce the existing EMI by two years. However, banks will have the full right to restructure the loan and these options will be for those whose income has completely ended in the Corona epidemic or they are troubled by pay cuts or other problems. It is noteworthy that RBI Governor Shashikant Das had announced the debt restructuring facility while announcing the monetary review policy. Under this, banks were given the option to extend the loan repayment period or to reduce the EMI by giving relief.

Relief is possible for personal loan
According to experts, banks can give relief not only to the customer taking home loan but also to the personal loan person. This is because when the RBI made the announcement, it also included a personal loan. However, said that the resolution of the stressed personal loan would be available only to those borrowers who have defaulted not more than 30 days on 1 March 2020. Banks can give a loan extension of two years to such loans. This extension can be granted with or without any restriction on the payment of loan installment. Customers can apply for restructuring before 31 December.

Preparations to stop NPA increases
Banks themselves also want to restructure debt, so that defaulters do not increase and the NPA of the bank does not increase. Banks also say that this time is not right for extortion and sealing of assets. Although the Reserve Bank of India has allowed all banks to extend the loan limit for up to two years, bankers say they cannot offer a moratorium of two years.

Kamat committee will not work on retail loan
According to sources, the KV Kamath committee will not focus on retail. Banks will have to prepare their own proposal for restructuring the retail loan, which they will submit to their board early next month. The Kamath committee may give its suggestion on the loan of more than 15000 crores early next month. The task of the Kamath Committee is to see how to take out the assets endured during the Corona period.

Losses to banks due to Moratorium
Banks are suffering losses due to the six-month moratorium given by RBI. It can be understood that if someone has taken a 15-year home loan and has used the Reserve Bank’s Moratorium facility, then his loan will automatically increase for 14 months. Home loan rates have come down to less than seven per cent and in such a situation banks are saying that it will not be possible to provide cheap interest rate by restructuring the loan. Doing so will increase the cost of banks.

 


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