New Delhi: The State Bank of India (SBI) has recently announced loan restructuring plan to reduce the impact of the COVID-19 pandemic on borrowers. SBI Card users have opportunity to take advantage of the loan restructuring plan. SBI started the enrollment process under restructuring plan for its ‘guilty’ customers. Borrowers who do not pay the EMI installment in the second period of the moratorium will be enrolled under the Restructuring Plan.They will be given more time and better interest plans for repayment.
The country’s largest bank has issued a statement saying that this policy is for accounts in which loan repayment capacity has been affected due to COVID-19. Here is the important information on SBI card including eligibility, benefits, restructuring plan, its impact on credit report.
Eligibility: SBI card will also generate a list of eligible accounts based on its assessment.
For this, the following things will be kept in mind.
1. Accounts that have been classified as standard accounts and there has been no default till at least 30 days before March 1, 2020. Such accounts will be eligible for restructuring.
2. The accounts have not been classified as NPA in the 12 months before 1 March 2020. It will include accounts which have availed of the moratorium between March 1 to August 31 or have not repaid the minimum arrears at least once.
3. Eligibility will be defined at the personal account level. It will not be at the level of customers. Suppose a person has more than one account and only one account is eligible, then only that account will get its benefits. Other accounts will continue to run normally.
Restructuring Plan: Under the existing restructuring plan, the total outstanding balance will be converted into a term loan of maximum 24 months. The rate of interest on restructured accounts will be between 13 to 19%. The interest rate will also depend on what the term of the loan is chosen between 3 to 24 months.
The resolution will have to be finalized by 31 December 2020 and it will have to be implemented within 90 days. For corporate accounts this limit will be for 180 days.
Restructuring plan how it will work: For this, customers have to provide EMI deducted auto debit or National Automated Clearing House (NHCH) or PDCs based on the plan’s consent. Its timeline will decide the SBI card.
Credit Card Status: If a customer opts for EMI plan then the extended facility on the credit card will be deactivated. The customer will not be able to use his credit card. However, when regular EMI will be done for 3 to 6 months, the card will be activated twice.
How will credit score affect?
The bank has also given information about credit score effect. If a customer chooses the restructuring option, it will be shown as ‘restructured’ in their credit report. After this, the credit history of the borrower will be governed by the policy of the credit information company.
This policy will not be applicable to SBI Card Employee accounts. Also, it will not include the accounts which have been restructured between March to July or the mandatory letter has been issued after settlement.