Page 28 - Banking Finance April 2021

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Who are eligible under this scheme? years) based on an assessment of income streams of the
borrower. Correspondingly, the overall tenor of the loan
Y In the said circular issued by RBI, clarity had been made
on the terminology of 'Personal Loan' which was may be got modified proportionately. The moratorium
explained with a deeper meaning that prior to the period, if granted, shall come into force immediately
issuance of circular is in the state of ambiguity. upon implementation of Resolution Plan.
Y Relief relating to FITL (Funded Interest Term Loan) shall
Y Personal Loan covers loans disposed to individuals and
consists of be only be extended in case of running borrowal
a) Consumer credit accounts.
b) Education loan
How it gets started i.e. the starting point
c) Loans given for creation/enhancement of
immovable properties in Resolution Process ?
Y After getting the inputs from the Borrower backed with
d) Loans given for investment in financial assets like documentary evidences in writing, the Lenders had to
shares, debentures etc. thereby covering almost all sketch the options available in terms of Resolution Plan.
types of loans given in the individual capacity.
As per case to case basis, keeping in consideration of
the impact of COVID-19 pandemic along with future
Are there any stipulations which are financial scenarios, a consensus had to be made in
needed to be checked while prior availing between lender and borrower on availing the type of
relief under Resolution Plan.
Resolution Plan under the said relief?
Y The date on which this consensus happens, will be
First and foremost thing is that of pegging the position of
marked as 'Date of Invocation' with a rider that the
Loan on the date of 1 March, 2020, borrower can avail this corresponding Resolution Plan must to be implemented
facility, only if,
within 90 days from the 'Date of Invocation'. Under this
Y Overdue component in loan as of 1 March, 2020 should relief this 'Date of Invocation' has to attain not later
not be of more than 30 days.
than 31 December, 2020.
Y Second is the viability in terms of serving the deferred/
restructured EMIs post or simply ascertaining the fact How to avail the Relief under the said
from Lender side that after the implementation of the
Resolution Plan, whether in the future course the Resolution Framework?
servicing of EMIs may happen by the borrower in his/ Y Prior to availing the available sort of relief under the
her financial capacity. said framework, in case the borrower is of segment:
Y The USP under the said relief is not only of granting a Salaried Class:
moratorium of 2 years but also a borrower is being They had to submit documentary evidence in
allowed to avail the facility of rescheduling of loan or
conversion of outstanding interest in separate credit
facility (according to the nomenclature of an account).

What are options available in Resolution
Plan under said relief package?
Resolution Plan in terms of addressing the said difficulties in
serving of the EMIs may be resolved by:
Y Rescheduling of repayments
Y Conversion of interest accrued or to be accrued into
another cash credit facility or
Y Granting of moratorium (subject to maximum of two

28 | 2021 | APRIL | BANKING FINANCE