Lost job? Pay cut? New SBI scheme to rejig retail loans

NEW DELHI: India’s largest lender State Bank of India (SBI) on Monday unveiled the set of rules it intends to follow for both personal and corporate loan restructuring process. For retail loan restructuring, the bank will check whether the applicants have lost their jobs or had their incomes reduced due to the pandemic. The loans will be restructured based on the customer’s future income. 

Borrowers can check their eligibility and upload relevant documents on the SBI website, which would be followed up by scrutiny and approval at the branch level. “We would like to address those who had a temporary job loss and are likely to come back… Retail customers will be offered a simple option to opt for 1-24 months of moratorium and reschedule the loans. Customers will also be offered a top-up home loan as a relief measure,” said C S Shetty, managing director of SBI.

This, however, would come at a cost. Borrowers will have to pay 0.35% additional interest over and above current pricing for the remaining tenure of the loan.The last date to apply for restructuring is December 24, 2020.Borrowers will need to get a resolution plan sanctioned before December 31, and the lender will need to implement the restructuring within 90 days. 

For non-personal loans, the bank will seek additional security in the form of promoter pledges for listed companies and personal guarantee for unlisted companies. A processing fee of 0.25% of the aggregate limits will also be payable, SBI said. For term loans and working capital loans, the interest cost would be increased by 100 basis points over the current pricing, the guidelines said.