 "SBI launches loan resolution scheme")
If you have defaulted on a loan from State Bank of India (SBI), the country's largest public sector bank, there's good news. The bank has put out advertisements in several newspapers for its 'loan resolution week', asking borrowers with non-performing assets (NPAs) to “try and work out a solution”. The week ends on May 30.
The scheme will be available to all, including retail, wholesale and SME clients, except wilful defaulters. However, the bank is expecting retail borrowers and SMEs to avail the facility. The loan resolution is applicable to all kind of loans, including personal, car and home loans.
“This is a good opportunity for genuine people to come clean and get things sorted out. We shall be happy to resolve NPAs through this route rather than take a legal option,” said PK Malhotra, deputy managing director, SBI. The facility is offered across India and there is no limit on the size of the loans or defaults. “We are getting a good response and getting five-10 cases per day in the active branches depending on the size of the branch,” added Malhotra.
This is the first time the bank is conducting a one-week loan resolution week. SBI holds special drives in the form of Bank Adalats across India occasionally depending on the kind of ground feedback it receives. These adalats are, however, held for loans of only up to Rs 10 lakh.
“In the current environment, talking to your lender proactively needs to be explored. Since this is a focussed activity, the chances of your issue getting resolved in good time are higher. You can negotiate with the lender, provided you showcase your intent to repay the dues,” said Harsh Roongta, director, Apnapaisa.com.
Here's how the process will work. The borrower has to visit his branch and submit his application in writing to the branch manager. For a one-time settlement, the manager will seek an in-principle nod from the sanctioning authority. The OTS may be denied or granted depending on the loan amount. Those opting for restructuring of assets may be counselled about the process.
In general, branch managers will deal with the situation directly or direct the borrower to a specialised branch. For instance, restructuring of old NPAs will be referred to the stressed assets management branches, while new NPAs will remain in the business units.
Borrowers can opt for rectification, restructuring or one-time settlement. If the person taking the loan has missed three-four EMIs, or if his account has become an NPA after 90 days of non-payment, the bank might send a legal notice. Retail borrowers can pay the amount overdue and get their accounts rectified to standard asset. For example, a person having six EMIs overdue, can pay at least two EMIs immediately with a promise to pay two EMIs every month.
Restructure involves resetting the EMIs, which will be done depending on the life of the asset. Borrowers can approach the bank to extend the loan tenure provided there already hasn't been an extension. “Unless you are in real trouble, it's best to avoid extending the tenure, as tenure extension is granted only once in the life of a loan,” said Malhotra. For a one-time settlement, the borrower has to pay 10 per cent immediately and the balance in three months.
The scheme will be available to all, including retail, wholesale and SME clients, except wilful defaulters. However, the bank is expecting retail borrowers and SMEs to avail the facility. The loan resolution is applicable to all kind of loans, including personal, car and home loans.
“This is a good opportunity for genuine people to come clean and get things sorted out. We shall be happy to resolve NPAs through this route rather than take a legal option,” said PK Malhotra, deputy managing director, SBI. The facility is offered across India and there is no limit on the size of the loans or defaults. “We are getting a good response and getting five-10 cases per day in the active branches depending on the size of the branch,” added Malhotra.
This is the first time the bank is conducting a one-week loan resolution week. SBI holds special drives in the form of Bank Adalats across India occasionally depending on the kind of ground feedback it receives. These adalats are, however, held for loans of only up to Rs 10 lakh.
“In the current environment, talking to your lender proactively needs to be explored. Since this is a focussed activity, the chances of your issue getting resolved in good time are higher. You can negotiate with the lender, provided you showcase your intent to repay the dues,” said Harsh Roongta, director, Apnapaisa.com.
Here's how the process will work. The borrower has to visit his branch and submit his application in writing to the branch manager. For a one-time settlement, the manager will seek an in-principle nod from the sanctioning authority. The OTS may be denied or granted depending on the loan amount. Those opting for restructuring of assets may be counselled about the process.
In general, branch managers will deal with the situation directly or direct the borrower to a specialised branch. For instance, restructuring of old NPAs will be referred to the stressed assets management branches, while new NPAs will remain in the business units.
Borrowers can opt for rectification, restructuring or one-time settlement. If the person taking the loan has missed three-four EMIs, or if his account has become an NPA after 90 days of non-payment, the bank might send a legal notice. Retail borrowers can pay the amount overdue and get their accounts rectified to standard asset. For example, a person having six EMIs overdue, can pay at least two EMIs immediately with a promise to pay two EMIs every month.
Restructure involves resetting the EMIs, which will be done depending on the life of the asset. Borrowers can approach the bank to extend the loan tenure provided there already hasn't been an extension. “Unless you are in real trouble, it's best to avoid extending the tenure, as tenure extension is granted only once in the life of a loan,” said Malhotra. For a one-time settlement, the borrower has to pay 10 per cent immediately and the balance in three months.