FAQ's On Restructuring

RBI vide its circular no. DOR. No. BP. BC. /3/21.04.048/2020-21 dated August 6, 2020, has provided a Framework for implementation of resolution plans for addressing the economic fallout due to the COVID-19 pandemic which has led to significant financial stress for the borrower(s).

This Framework has been provided with the intent to facilitate a revival of real sector activities and mitigate the impact on the ultimate borrowers. The resolution under this facility is to be extended only to borrowers having stress on account of COVID-19.

Based on this Framework and regulatory guidelines, Vastu HFC has framed its policy for the restructuring of the loan(s) / facility (ies) of individuals which have been impacted due to the pandemic.

Q. 1What is the restructuring scheme approved by RBI?

A. RBI has provided a framework to banks & lending institutions for the implementation of resolution plans for addressing the economic fallout due to the COVID-19 pandemic, which has led to significant financial stress for customers.

B. Basis the Framework and regulatory guidelines, Vastu Housing Finance, framed its policy for the restructuring of the loan/s of individuals and entities that have been impacted due to the COVID-19 pandemic.

Q. 2Who is eligible for restructuring?

A. Credit facilities of individuals which are classified as 'Standard Account' and are not in default for more than 30 days as on March 1, 2020.

B. The individual should continue to be classified as 'Standard Account' till the date of invocation of the application for restructuring.

C. The reduction of income/cash flow and its financial impact on the customer due to COVID-19 will be reviewed by us basis the documents/information provided before granting the restructuring.

D. The final restructuring decision on a loan facility is solely at the discretion of Vastu HFC.

Q. 3What type of loans are not eligible under the resolution framework?

A. MSME borrowers whose aggregate exposure to lending institutions collectively, is 25 Crore or less as on March 1, 2020. (Covered under a separate scheme of RBI)

B. Farm credit

C. Loans to Primary Agricultural Credit Societies (PACS), Farmers' Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture.

D. posures to financial service providers

E. Exposures to Central and State Governments, Local Government bodies (e.g., Municipal Corporations) and body corporates established by an Act of Parliament or State Legislature

F. Consumption loans to farmers under KCC

G. NPA loans as on March 1, 2020

H .Loans with a DPD status of more than 30 days as of March 1, 2020

I .Accounts having financial stress for reasons other than COVID-19

Q. 4Am I eligible if I have taken a loan after March 1, 2020, but affected by Covid-19 pandemic?

A. No, only those accounts that existed in Banks books as on 01.03.2020, are eligible for consideration under this Framework.

Q. 5What documents are required for availing restructuring?

A. Salaried Customers – Latest 3 months pay slips, bank statements

B. Self-employed Customers - Bank statement for latest 6 months

C. These requirements may vary depending on the kind of loan availed and loan outstanding

Q. 6Will opting for restructuring impact my credit bureau report?

A. As per regulatory guidelines, your loan facility will be reported to the credit bureau as "Restructured" under the Prudential Framework

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

A. You will be required to pay additional interest over and above your current pricing for the remaining tenure of the loan, to offset the restructuring. The additional interest may range between 0.5% - 1% p.a. The same will be applicable on case to case basis.

Q. 8How can I apply for restructuring of credit facilities?

A. You can submit a request on customercare@vastuhfc.com

B. visit the nearest Vastu HFC Branch, or

C. contact your relationship manager for details

Q. 9What is the last date for applying for restructuring plan?

A. The borrower needs to submit the request for restructuring of credit facilities on or before December 31st, 2020

Q. 10What are the restructuring options available to the borrower?

A. Moratorium of up to a maximum of 3, 6, or 9 months from the date of invocation.

B. Rescheduling of instalments and extension of tenure by a period equivalent to the moratorium granted subject to a maximum of 2 years. 

C. Additional credit facility in the form of top ups to eligible customers having Working Capital requirements

Q. 11Will I get any confirmation from Vastu on applying for restructuring?

A. Yes, a supplementary agreement shall be executed for customers opting for restructuring

B. A copy of the agreement shall be shared with the customer for their reference

C. An automated SMS will be sent specifying updated loan terms post restructuring

Q. 12I have a loan along with co-borrowers/guarantors. Will all the co-borrowers/guarantors of the original loan agreement be required to sign the revised restructuring agreement?

A. As per regulatory and legal requirements, the signature of all borrowers/co-borrowers/guarantors of the original loan is required on restructuring agreement/documents.

Q. 13By what date, we can apply for a benefit under this scheme?

A. As per extant regulations, the resolution plan should be sanctioned maximum by 31.12.2020

Q. 14If the borrower has applied for restructuring, can it be considered as having been accepted and implemented by the Vastu HFC?

A. No. The application for restructuring of credit facility does not guarantee its acceptance. Once the borrower applies for restructuring of credit facility, Vastu will review the application based on its internal policies. Thereafter, it will communicate the status of the application.

Q. 15If I have surplus cash during Moratorium/Restructuring period, whether I can pay EMIs during moratorium?

A. Yes, it is up to you. This will help in reducing your interest amount.