Axis Bank Shares Debt Restructuring & One Time Loan Settlement Options

02 Oct 2020 // 12 min read // #mmm news
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Abiding by RBI’s restructuring guidelines for stressed accounts Axis Bank has released a form for applying for debt restructuring for salaried individuals. The facility is available to all those who are impacted due to COVID19.

The customers can fill the form and submit to the bank branch.

The Axis Bank’s restructuring form can be accessed here:

https://www.axisbank.com/docs/default-source/default-document-library/restructuring-request_application_v1–salaried_28-sep-2020.pdf

Customers are required to shared details of account restructuring is sought for along with reasons to opt for restructuring. The documents to prove income loss are required to be attached with the form. The bank has also offered one time loan settlement options to small business units. The customer is also expected to share current income, projected income and other sources of income in the application.

Some of the common points to note for restructuring of various accounts are:

  • The bank will review the application and approve of restructuring after assessing the financial viability and repayment capability of the borrower.
  • Wilful defaulters, those indulged in frauds and malfeasance will also not quality. Though cases may be considered after satisfactory steps to rectify wilful default.
  • BIFR cases are not eligible without express approval.
  • Restructuring should be implemented within 90 days of receipt of application.
  • The repayment period for restructured account (including the moratorium) should be less than 10 years.
  • Promoters margin of minimum 15% of Bank’s sacrifice and personal guarantee of the promoters wherever applicable.
  • The right of recompense clause will stay.
  • The Bank should have the right to pre-pone repayment instalments if projections are over achieved.
  • A one-time restructuring fee of Rs. 2500 plus GST is also applicable for approved application.

On One Time Settlement Axis Bank issued statement:

In terms of RBI’s “Master Circular – Lending to Micro, Small and Medium Enterprises (MSME) Sector”, Bank shall follow a merit based non-discretionary, one-time settlement policy for the recovery of NPAs under MSE Sector. All settlement proposals/offers shall be examined by the Bank’s delegated authority based on facts and merits of each case.

List of Documents to be enclosed with the application

1. KYC documents of all stakeholders, including borrowers, guarantors (Voter ID, Passport, Driving License, UID)

2. Bank statements for last 12 months for all co borrowers.

3. Salary slips for latest 6 months with banking reflection

4. Latest 2 years IT returns and Form 16 for latest year or Form 26 AS for FY20 and FY21 till date

5. In case of job loss, salary cut or deferment a letter from current employer about the same is required.

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