RBI announces one-time loan restructuring for financial lenders

RBI announces one-time loan restructuring for financial lenders

January 04, 2021 Admin
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Are you looking for ways to restructure your loan?

As a result of the Covid-19 life has come to a halt. Many businesses have been disrupted and as an immediate effect of this many individuals who are under financial obligations have lost their sole source of income. Thus in order to manage the financial stress caused due to the pandemic, the RBI has announced the policy of one-time loan restructuring for various companies and individuals. It has put people and organizations at ease and has helped them manage their financial obligations.

Hence this special one-time loan restructuring policy has acted as a sigh of relief for many businesses and people who were unable to pay back their loans due to lack of funds.


What is a one-time loan restructuring scheme?

In simple words, one-time loan restructuring refers to making changes in terms of credit by the lender in order to provide assistance and support to the borrowers when he/she is under financial stress. The NPA position of the commercial banks had already reached an adverse level causing a big concern. Hence this special scheme prevents the loan account from falling into the (Non-performing asset ) NPA category and provides relief to them from becoming a defaulter for non-payment of dues on time.

Although the scheme is beneficial for those who are unable to pay their monthly installments on time but in order to avail, the scheme one has to pay a stipulated rate of interest.


The creditworthiness of an individual is assessed thoroughly by the lending institution in order to decide whether the applicant would be able to repay the loan on time.


A loan whose principal amount or interest has not been paid over a period of 90 days or more is considered an NPA and is not eligible for the one-time loan restructuring scheme. The overdue as of 1 March 2020 should not be more than 30 days to be eligible under the scheme.


RBI announces one-time loan restructuring for financial lenders


Eligibility criteria for one-time loan restructuring

  • Besides individual, this scheme is for those accounts which have multiple banking/consortium accounts or have availed syndication. The outstanding exposure of such accounts must be 25 crores or more from the financial institutions.
  • The account is eligible for consideration under this scheme only if at least 75 percent of its lenders by value and 60 percent by the number of its borrower take the initiative and approve the plan.
  • In all cases involving multiple lending where the resolution process is invoked and consequently a resolution plan has to be implemented, ICA shall be required to be signed by all lending institutions within 30 days from the date of invocation.
  • The expert committee appointed by RBI has suggested benchmark financial ratios for assessing the viability of the project which will be required to be complied with.

If you are into the corporate business and are experiencing any financial hassles, then look no further than obtaining the services of the top investment banks. Timely payment of dues/EMI is the key to improve your creditworthiness and to help obtain sources of finance in the future. Hence this once in a lifetime scheme of one-time loan restructuring for corporates and individuals can help you from unnecessary financial distress and help you plan your finances better. It would pave the way for growth for your business and help you plan so as to thrive in the corporate sector and achieve milestones.

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