Restructuring of Personal/Non-MSME Business Loan
It has been the endeavor at Shivalik Small Finance Bank (SSFB) to accord utmost priority and sincerity towards implementation of Government policies, schemes, and decisions. Owing to the resurgence of COVID-19 pandemic which may impact the recovery process and create new uncertainties, the RBI announced certain measures vide its circular dated May 05, 2021. Accordingly, SSFB has designed a frame-work for rehabilitation of such cases under our Personal/Non-MSME Loan portfolio and place here under necessary directions to be followed while implementing the package.
All banks wishing to utilize this scheme must put in place a board approved policy and this document sets out the policy and procedures as would be applicable on SSFB.
Meaning of Personal Loans
As per RBI circular no “DBR.No.BP.BC.99/08.13.100/2017-18” dated January 4th, 2018, Personal loans refers to loans given to individuals and consist of (a) consumer credit, (b) education loan, (c) loans given for creation/ enhancement of immovable assets (e.g., housing, etc.), and (d) loans given for investment in financial assets (shares, debentures, etc.)
Applicability and Scope for SSFB
For Personal Loans, the following products would be included in the scheme.
PL-Personal Loan Small TL
PL-Personal Loan TL
PL-Renewable Energy TL
HL-Housing Loan TL
ED-Education Loan TL
VL-Two-Wheeler Loan TL
VL-Four-Wheeler New TL
VL-Four-Wheeler Loan Used
For Business Loans, the following products would be included in the scheme.
BL-Business Asset Loan TL
BL-Retail Trade Small TL
BL-Retail Trade Micro TL
VL-Used Com Vehicle TL
VL-New Com Vehicle TL
BL-CC Limit Industry
BL-CC Limit Trader
BL-DL Working Capital
Key Features of the Scheme
Asset Classification Norms
Type of Resolution Plans
The accounts can be restructured / re phased provided-
The projected/estimated income of the borrower to be the basis for restructuring and fixing future EMI's Initial Assessment
All branches, wherever such cases exist, will compile a list of all such accounts and forward it to Recovery Team citing complete facts of the case and circumstances with specific recommendations, for in principle approval of the same. Format to be submitted by branches for in principle approval is enclosed as Annexure 1.
Nominal amount as fee (onetime charge) for restructuring, are proposed hereunder, to maintain borrower’s interest in the project and re scheduling to be recovered up front to discourage rescheduling on whimsical grounds.
Rs. 2500.00 +GST
>5 to <=25 Lakh
Rs. 5000.00 +GST
Rs. 10000.00 +GST
Board has approved sanctioning/approving powers for restructuring of loan accounts under this scheme to the restructuring loan committee. The format for consideration under this scheme is mentioned in Annexure 3.
The sanctioning authority has to consider the following whilst deciding on the proposals:
Post sanctioning by appropriate authority the agreement will be re-executed between SSFB, and borrowerand extension of mortgage will be done on existing collateral.
Post Sanction Monitoring
The accounts will be kept under special monitoring and will be monitored by CH and Credit Monitoring teamat H.O. Collection/ recovery proceedings, as and when required, will continue as per normal recovery policy.
SSFB shall make disclosure in their quarterly financial statements as per the below format –
Format for disclosures to be made in the quarters ending September 30, 2021, and December 31, 2021
Number of requests received for invoking resolution process under Part A
Number of accounts where resolution plan has been implemented under this window
Exposure to accounts mentioned at (B) before implementation of the plan
Of (C), aggregate amount of debt that was converted into other securities
Additional funding sanctioned, if any, including between invocation of the plan and implementation
Increase in provisions on account of the implementation of the resolution plan
Along with point no.1, SSFB shall also make below disclosure in their half-yearly financial statements, starting from the half-year ending September 30, 2021 till all exposures on which resolution plan was implemented are either fully extinguished or completely slips into NPA, whichever is earlier.
Format for disclosures to be made half year starting September 30, 2021
Of which MSMEs
* As defined in Section 3(7) of the Insolvency and Bankruptcy Code, 2016
2. In point no.1, disclosures of those borrowers are also to be made who has been given further moratorium/extension of tenor benefit who’s previous availment was less than 2 years.
Annexure 1 (FOR PERSONAL LOANS)
Format to be filled in by the branch and submitted to CCAT for consideration of case/s for the purpose of restructuring. Separate sheet to be used for each account.
Name of borrower (Copy of sanction to be enclosed)
Name of Co-Borrower
To Be filled at H. O
Name of Guarantor
Date of Grant of Facility
If Salaried, Name of Employer
If Self-Employed, Line of activity / Nature of business.
Amount of facility (Lakhs)
Total Tenor of Loan
Balance Tenor of Loan as per original term of sanction
Date of commencement of EMI
Present outstanding (Lakhs)
In case of EMI, no of EMIs overdue.
Present state of business/Job – Running / Closed
Reasons of default
Proposed Tenure post restructuring
Proposed EMI post restructuring
Whether Overdue interest also to be capitalized
Yes / No
Overall feasibility and viability post restructuring envisaged
All T & C of previous sanction complied with. If No, then T& C not complied with.
Valid EM is created.
Security documents are valid and in force.
Date of last inspection
Indicative Remedial Measures (as confirmed by the Borrower)
Rectification (as confirmed by the Borrower)
Any adverse feature observed during inspection (Copy of last inspection report to be enclosed).
Credit Officer at Branch/Asset Centre Executive
Branch Manager/Asset Centre Incharge
Cluster Head observations and recommendations
In-principle observations and approval.:
Approved / Not approved
Annexure 1 (FOR NON-MSME BUSINESS LOANS)
Constitution of Borrower i.e. Prop. Partnership/ Ltd. Co/ Individual
Name of Prop. / Partner/ Director etc.
Line of activity / Nature of business. (Please specify whether any value addition is made e.g. Packing Sugar / Pulses or other articles in Polythene Bags, making weight specific packs from loose products, Stationer adding Cover on Note Books / Books etc. The list is exhaustive and will cover all activities which enhance the value of any product from Raw form to packaged form or ready to consume form)
Present state of business – Running / Closed
Format of written request to be obtained from borrower for restructuring his loan account. Format to be countersigned by Guarantor in the account. (On stamp paper of Rs. 100)
ToThe Branch Manager,Shivalik Small Finance Bank Ltd.BranchDate:
Sub: Reschedulement of my/our Loan Account number____________in the name of______
I / We were sanctioned a Term Loan of Rs.____________(Sanction Limit) from your Bank on____________ (Sanction date) and the same was repayable in____________(No. of EMIs) EMIs commencing-____________(EMI start date). Due to certain circumstances beyond our control, I/we could not repay the EMIs regularly and presently a sum of Rs.____________is outstanding out of which Rs.____________is overdue.
I / We request you to kindly reschedule my / our loan in EMIs commencing . A moratorium of months is desired
I / We undertake to make the payments of our loan regularly; in case the rescheduling is allowed and assure you that there shall be no default. I / We further confirm that this is one and last time I am / we are seeking a reschedulement of the loan and no further reschedulement shall be sought in future.
Failure to honor the terms of reschedulement shall render me / us liable for action, including penal action, as per the policy of the bank which may include disposal of our assets, charged to the Bank.
Borrower/Co-borrower(Seal in case of firm/company)Guarantor
Format for presentation of the case to the sanctioning authority
Insert the table from Annexure 1
Was the account classified as a standard asset on 1 March 2020?
Whether the DPDs as on 1 March 2020 are not more than 30 days?
Was the account classified as a standard asset as on the date of restructuring/moratorium granting?
Is the restructuring being implemented before 31 March 2021?
Customer Eligible under this scheme?
(No, if any responses to
queries 1 – 6 are “No”)
Details of Stress faced by the Individual (please select one or more as applicable)
Failed to make timely payment of instalments of principal and interest on term loans.
Decline in salary/income
Failed to meet the daily/routine expenses
Any COVID related death in the immediate family? (either parents, siblings or people living in the same house)
Any Hospitalization in the immediate family? (either parents, siblings or people living in the same house)
Case Scrutiny Points
Review of Bank statement/Credit Turnover
Sales figures for March – September in case of self-employed borrower
Previous and Current Salary status in case of salaried borrower
Have customer / immediate family been infected with COVID?
Was Business / Residence in containment zone? If yes, for how long
Gross Total Income
Add: Partner Salary
Add: Payment U/s 40 A(2) b
Add: Interest on loans
Less: Capital Gains (if any)
Less: Tax (Estimated for CY)
Mode of Filing
Date of Filling
Restructuring Committee’s observations and approval.: The above matter was taken up in MLC/SLC
Restructuring Terms and Conditions: (please select one or more as applicable)
Reschedule of Instalments
Capitalization of interest
Fresh and/or additional TL
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