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Covid Resoluation Plan

RBI Reference

Resolution Framework 2.0 — Resolution of Covid-19 related stress of Individuals and Small Businesses as per RBI Notification DOR.STR.REC.11/21.04.048/2021-22 dated 05.05.2021.

Part A

Individuals & Small Businesses

Eligible Individual Loans

Education Loan

Vehicle Loan

Housing Loan / Mortgage Loan against Property

Business Loan

Solar Loan

Small Business Loans: Small businesses engaged in retail and wholesale trade, other than those classified as MSMEs as on March 31, 2021.

Not Eligible

Loans against Fixed Deposits

Credit facilities sanctioned by the Bank to its own staff

Borrowers who have already availed resolution under Framework 1.0 (extension of moratorium / residual tenor can still be permitted)

Accounts which are not standard as at 31/03/2021

Invocation of Resolution Plan

  • Resolution is provided only to borrowers having stress on account of Covid-19.
  • Resolution shall be invoked not later than 30.09.2021 and the resolution plan finalized and implemented within 90 days from the date of invocation.
  • The resolution process is treated as invoked when the Bank and the borrower agree to proceed with efforts towards finalising a resolution plan.

Conditions of Implementation

The resolution plan shall be deemed implemented only if all of the following conditions are met:

  • All related documentation, including execution of necessary agreements between the Bank and borrower, are completed and collaterals (if any) are provided in consonance with the resolution plan.
  • The changes in terms and conditions of the loans are duly reflected in the books of the Bank.
  • The borrower is not in default with the Bank as per the revised terms.
  • Documents as approved and attached (Annexure 1 to 4) are obtained from the borrower.

Features of Resolution Plan 2.0

Rescheduling / Moratorium: Rescheduling of EMI/instalment payments or conversion of accrued/accruing interest into another credit facility, or grant of moratorium — based on income stream assessment of the borrower — subject to a maximum of two years from date of implementation.

Residual Tenor Extension: Extension of residual tenor with or without moratorium — overall cap (including moratorium) is maximum two years.

Fresh Repayment Schedule: A fresh repayment schedule shall be generated for all Term Loans where the Resolution Plan is implemented.

Working Capital Borrowers — FITL Terms

If interest conversion into another credit facility is permitted, an additional ROI of 1.00% p.a. shall be charged on such additional / conversion / new facilities.

Unpaid interest up to invocation date and future interest (for maximum 6 months) may be converted into FITLs.

Moratorium of maximum 6 months may be factored for repayment of monthly instalments of FITLs; however, monthly interest on FITLs shall be paid as and when debited.

FITLs to be repayable within a maximum of 2 years, including moratorium period permitted (if any).

FITLs will carry additional ROI @ 1% per annum over and above the prevailing / sanctioned ROI for underlying facilities.

Extension for Framework 1.0 Accounts

For borrowers where Resolution Framework 1.0 was implemented with moratorium or residual tenor extension of less than two years, modification is now permitted — up to a maximum of two years combined (Framework 1.0 + Framework 2.0). Eligibility, invocation, and implementation guidelines of Framework 2.0 apply.

Security

Existing securities shall continue to be extended for the restructured facilities.

Documents

Documents as per Annexure 1 to 4 are to be obtained from the borrower.

Sanctioning Authority

Chief Executive Officer.

Part B

Individuals & Small Businesses

RBI Reference: DOR.STR.REC.12/21.04.048/2021-22 dated 05.05.2021 — Resolution Framework 2.0 for Micro, Small and Medium Enterprises (MSMEs).

Eligibility & Applicability

Credit facility / investment exposure shall be standard as at 31.03.2021 and not restructured previously.

Unit should be under stress on account of COVID-19 economic fallout and should be viable for considering under the resolution plan.

Borrower must be classified as Micro, Small or Medium Enterprise as on March 31, 2021 (Gazette Notification S.O. 2119 E dated June 26, 2020).

If not registered in Udyam Registration Portal, such registration must be completed before the date of implementation.

Borrowing entity must be GST-registered on date of implementation (not applicable to MSMEs exempt from GST as on March 31, 2021).

Restructuring must be invoked by September 30, 2021 and implemented within 90 days from date of invocation.

Accounts that slipped into NPA between April 1, 2021 and date of implementation may be upgraded as 'Standard Asset' on the date of implementation.

Restructuring Options

  • Rephasing / Rescheduling repayment of outstanding term loans, with or without change in balance repayment period / instalments.
  • Conversion of irregularities or a portion of outstanding working capital limits into WCTL (Working Capital Term Loan) / FITL (Funded Interest Term Loan) payable over a period.
  • Rescheduling the payment of interest outstanding / accruing on term loans into FITL / deferment or conversion into FITL / debentures / equity.

Processing Charges

0.50% of the outstanding loan account eligible for resolution.

Documents

Annexure 1 to 4 to be obtained from the borrower.

Security

Existing securities continue for restructured facilities.

Sanctioning Authority

Chief Executive Officer.