State Bank of India is offering a moratorium of up to two years to retail borrowers under the loan-restructuring scheme approved by the Reserve Bank of India. Home, education, auto or personal loans will come under the loan-restructuring option. Customer needs to pay the interest during the two-year moratorium period. India’s largest lender will also charge an additional interest of 0.35% per annum under loan-restructuring scheme.

The retail borrowers will have an option to opt for 1 to 24 months of moratorium. To apply for the moratorium, the loan should be a ‘standard account’ as on the date of application for relief under this framework and should have been ‘standard’ and also not in default for more than 30 days as on 01.03.2020, the bank said.

Those who have affected by coronavirus pandemic will be eligible for the scheme. A borrower will be considered as affected by COVID-19 pandemic, if any of the following conditions are fulfilled: 1) Salary or income in Aug 2020 has got reduced when compared to Feb 2020, 2) Reduction or suspension in salary during lockdown period, 3) Job loss/closure of business or 4) Closure during lockdown or reduced activity of units or shops or business establishments in case of self-employed or professionals/businessmen.

The customer can visit SBI official website to apply for loan restructuring option. The borrower needs to enter valid details like account numbers and mobile numbers on the bank’s website. Then, the application will be validated by an OTP. The customer will know if he or she is eligible for the scheme and receive a reference number. This reference number will be valid for 30 days. Then the borrower can visit the nearest SBI branch to complete the required formalities.

Here are the list of the documents that need to be uploaded if you are applying online:

1) Salary slips for the month of Feb 2020 and current/latest salary slip.

2) A declaration of estimated salary/income immediately after the end of the desired moratorium period (Maximum 24 months).

3) Letter of discharge from job (in case of job loss).

4) Account statements of the account where salary is credited in case of salaried employees or statement of Operating Account in case of businessmen or self-employed or professionals for the period Feb 2020 till 15 days prior to submission of application.

5) Declaration by self-employed professionals/ businessmen declaring that their business is affected by COVID-19.

The customer will also have an option to visit the branch where the account is maintained and submit the loan-restructuring application.

How will it work?

On account of moratorium granted, the tenure of your loan will be extended by the period of moratorium and the EMI payable after the moratorium will be recalculated. Additional interest of 0.35% p.a over and above your current pricing for the remaining tenure of the loan will be levied by the bank. This is to offset the partial cost of additional provisions required to be made by the bank, the bank said.

The last date to apply for relief under the loan-restructuring scheme is December 24.

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