After the Reserve Bank of India (RBI) released the ‘Resolution Framework for COVID-19 Related Stress’ in September 2020, Canara Bank has explained its guidelines for Resolution Framework for Personal Loans.
The guidelines are mentioned in the form of Frequently Asked Questions (FAQs) on the bank’s website in four different sections, viz.:
Read below for FAQs on Canara Bank’s Resolution Framework for Personal Loans:
All retail borrowers of the bank having stress due to COVID-19 and classified as standard, but are not in default with the Bank for more than 30 days as on 01.03.2020, are eligible under the framework.
The resolution plans may include rescheduling payments, conversion of interest accrued (or to be accrued) into another credit facility, and granting moratorium based on income streams assessment of the borrower, subject to a maximum of up to 2 years.
The Resolution Plan is applicable to all personal loans (with some exceptions).
Following types of borrowers are eligible under the Resolution Framework:
The reference date for the outstanding debt amount that may be considered for resolution is 01.03.2020.
Resolution under this framework should be invoked before 31.12.2020 and must be implemented within 90 days from the invocation date.
Yes. There is a fee of 0.1% of the outstanding loan amount that is eligible for resolution (subject to minimum Rs. 1,000 & maximum Rs. 10,000). All other applicable charges will be collected as per extant guidelines.
No. Existing securities will continue to be extended for the restructured facilities.