Lenders, including SBI, are working on restructuring options for home loans where the overall tenure of the loan does not extend by more than two years, even after relaxing the repayment schedule. According to a report in the Times of India, in cases where borrowers have suffered total loss of income, banks may allow EMI deferment for a few months. In some cases, step-up EMIs, with a lower payout for a couple of years to make up for a reduction in salary banks due to the Covid-19 pandemic, the daily mentioned. The report says banks don't want to classify defaulters as non-performing assets as it is not the right time to enforce security and confiscate assets.
The report further says banks will draft their own proposal and make a submission to their boards after getting an exact idea over the number of borrowers who are facing financial stress.Notably, banks had requested the RBI to allow one-time restructuring of loans as they don't want to classify defaulters as non-performing loans. Last week, RBI gave permission to lenders to go for a one-time restructuring of corporate and personal loans facing stress due to the disruptions caused by coronavirus. "The Reserve Bank of India''s decision allowing lenders to restructure loans would increase their refinancing requirements, especially for non-banking banking companies (NBFCs)," India Ratings and Research said in a report.