Restructuring

Canara Bank Loan restructuring is available for personal loans, mid-corporate credit, MSME credit and large corporate credit. The benefit of loan restructuring is available to all the eligible borrowers of Canara Bank. 

The meaning of loan restructuring in the simplest terms is the modification of an existing loan. The recent pandemic has affected millions across the nation. Many have lost their livelihood i.e., their jobs and their businesses. In many cases, individuals have had to take salary cuts or pay cuts with the silver lining of at least keeping their jobs. 

Personal Loan restructuring is a way of helping the people affected by the recent Covid-19 pandemic. The restructuring provides relief in paying the EMIs due. Under this moratorium, relief can be provided in the following manner. 

The 2nd Covid-19 wave saw many borrowers facing financial crunch. To help borrowers meet their financial exigencies, RBI brought forth Resolution Framework 2.0, to be mandated by lenders including banks and financial institutions, on 5 May, 2021. 

Most businesses, whether small scale or large scale, have multiple loans to run their business. When they reach a distressing level of debt management, the lenders and the management renegotiate some of the terms of the loans to arrive at a win-win situation. 

Strategic Debt Restructuring Scheme or the SDR from the RBI, enables banks who have issued loans to corporates, to convert a part of the total outstanding loan amount and interest into major shareholding equity in the company. 

Personal loans are unsecured loans that prove to be a convenient choice for many individuals. It comes with comfortable repayment terms. However, the current Covid situation has put immense pressure on borrowers in repaying personal loans. 

The current Covid-19 situation has made many borrowers rethink their loan repayment strategy. Uncertainty in jobs, non-payment of invoices, the general lull in the business are all some of the factors dampening the economy and in turn, affecting loan repayments. 

Restructuring generally refers to ‘Debt Restructuring’ in the finance world. Debt restructuring is a method used by businesses, individuals, and even governments to avoid defaulting on current loans by securing lower interest rates. When a debtor is in financial distress, debt restructuring is a less costly solution to bankruptcy, and it will help both the borrower and the lender.