As the moratorium period ended on 30th September, the RBI has allowed for restructuring of loans to help borrowers overcome the financial stress caused by the pandemic. The RBI has instructed banks and other lending institutions to come up with a plan for implementing the restructuring. 

Banks and NBFCs can restructure loans of borrowers who meet their eligibility requirements. As per the restructuring, borrowers and lenders can decide to extend the tenure of the loan by a maximum of 24 months, including the moratorium period, at the bank’s discretion to facilitate EMI repayment troubles.

While all retail loans like home loans, personal loans, education loans, business loans are eligible for restructuring, certain types of loans are NOT eligible for restructuring. Loans that are NOT eligible for this scheme include:

  • Tractor loans
  • Loans to individuals/entities for agricultural purposes and classified as agricultural loans by the bank 
  • Loans to agricultural credit societies 
  • Loans to financial service providers
  • Loans to central, state and local government bodies 
  • Loans to bank employees
  • Loans to housing finance companies which have already been rescheduled 

Note that Loans given for commercial usage will be entitled to claim relief under the MSME guidelines. Self-employed individuals/entities falling under the MSME category as per the revised guidelines for MSME classification rolled out by the Government of India, can apply for relief under the MSME restructuring scheme.  Please contact your bank relationship manager for more details.