Resolution Framework 2.0: Relief from
Covid-19-related Stress

This policy is in adherence to RBI circular Resolution Framework 2.0: Resolution of COVID-19 related stress of Individuals and Small businesses (DOR.STR.REC.11/21.04.048/2021-22 dated May 5, 2021). The viability of the resolution plan will be assessed, subject to the prudential boundaries laid out by RBI.

The reference date for the outstanding amount of debt that may be considered for resolution shall be March 31, 2021. Further, the Policy is applicable to existing borrowers, in retail portfolio of Piramal Finance.

The dispensation allowed by RBI is not a mandatory dispensation and Piramal Finance will assess the impact on borrowers to offer the dispensation.

Communication To Eligible Borrower/(s)

• Borrowers are not automatically eligible for dispensation under this policy. Piramal Finance has laid down criteria under which the dispensation shall be granted.
• The decision to grant/reject the dispensation shall be communicated in writing to borrowers within 30 days from receipt of application.

Key Features Of The Resolution Plan

Based on income stream of the borrowers the resolution plan may include:

• Rescheduling of payments
• Conversion of any interest accrued or to be accrued into another credit facility
• Granting of moratorium
• Tenor extension

Note: Compromise settlements are not permitted as a resolution plan for this purpose.

Type Of Loans Eligible

The Policy is applicable to all loans originated by Retail department of the Company (including portfolio purchases). The Policy is applicable to following types of loans.

• Housing Loans
• Loans availed by individuals for business purposes
• Loans given to small business including those engaged in retail and wholesale trade, other than those classified as micro, small and medium enterprises
• Auto Loans
• Personal Loans
• Consumer Durable Loans

Eligible Borrowers

The following categories of borrowers are eligible

• Individuals who have availed of personal loans (as defined in the Circular DBR.No.BP.BC.99/08.13.100/2017-18 dated January 4, 2018 XBLR returns – urbanization of banking statistics)
• Individuals who have availed of loans and advances for business purposes and to whom the lending institutions have aggregate exposure of not more than INR 25 crore as on March 31, 2021. The limit on aggregate exposure was revised to INR 50 crore as on March 31, 2021, as per RBI circular RBI/2021-22/46 DOR.STR.REC.20/21.04.048/2021-22, dated June 04, 2021
• Small businesses, including those engaged in retail and wholesale trade, other than those classified as micro, small and medium enterprises as on March 31, 2021, and to whom the lending institutions have aggregate exposure of not more than INR 25 crore as on March 31, 2021. The limit on aggregate exposure was revised to INR 50 crore as on March 31, 2021, as per RBI circular RBI/2021-22/46 DOR.STR.REC.20/21.04.048/2021-22, dated June 04, 2021

Borrowers shall need to meet all the below criteria as mentioned below

• Borrower having stress on account of COVID-19
• Borrower accounts classified as standard, as on March 31, 2021

Note: The final decision on the eligible borrowers shall be with the Approving Authority

How To Apply

• Go to our application form and fill out the details.
• Submit all your Income and KYC documents.
• Wait till the application gets processed for verification.
• If everything meets the eligibility criteria, your loan will be approved within a few minutes.
• Subsequently, the loan amount is disbursed and credited to your bank account.

Verification Process to Confirm the strain Due to Covid-19 Affecting The Income Stream

For Personal Loans

a) In the scenario of pensioners or salaried persons: There should be a job loss or reduction in the salary, etc. To verify this, Piramal Finance ensures checking and verifying the latest bank account details and salary slips while comparing them with the previous period.

b) In the scenario of non-salaried persons: The income stream should encounter a drastic downfall. For this purpose, we may verify the GST return and bank account details.

c) In both scenarios: In the lack of any paperwork evidence, the loss of income due to the pandemic would be considered a declaration as well.

Besides these above scenarios, the following scenarios also qualify for resolution, given you provide the documentary evidence:

a) If you or your dependents got Covid positive and needed hospitalization, which resulted in huge treatment costs, you qualify for the relief.

b) Death of the borrower (you) or the co-borrower due to covid-19.

c) Relief in the education loan due to delay in getting employment or delay in the completion of the course.

d) Relief in housing loan due to delay in possession of the house or delay in construction finish due to covid-19

For Small Business Loans

a) Entity or business owners' bank statements for the past six months may indeed be examined and contrasted to those from previous periods.

b) Entity or business owner’s GST return for the past six months may indeed be examined and contrasted to those from previous periods.

c) A self-attested statement of profit and loss for the fiscal year that ended on 31st March 2021 may very well be confirmed.

Interest Rate: The loan accounts’ rate of interest is in effect revamping under this framework and will be 0.50% in addition to the current loan accounts’ interest rate.

Categories/Credit Facilities Not Eligible for A Resolution Plan Under this Framework

• Piramal Finance personnel/staff
• MSME borrowers whose aggregate exposure to lending institutions collectively, is INR 50 crore or less as on March 31, 2021
• Farm credit as listed in Paragraph 6.1 of Master Direction FIDD.CO.Plan.1/04.09.01/2016-17 dated July 7, 2016 (as updated), except for loans to allied activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture are excluded from the scope of the Resolution Framework. Subject to the above, loans given to farmer households would be eligible for resolution under the Resolution Framework if they do not meet any other conditions for exclusions listed in the Resolution Framework
• Loans to Primary Agricultural Credit Societies (PACS), Farmers' Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture
• Exposures of lending institutions to financial service providers
• Exposures of lending institutions to Central and State Governments; Local Government bodies (eg. Municipal Corporations); and body corporates established by an Act of Parliament or State Legislature

The borrower accounts should not have availed of any resolution in terms of the Resolution Framework 1.0 under “Policy on Resolution Framework for COVID-19 related Stress ” issued by Piramal Finance subject to the special exemption mentioned here under.

However, the accounts/exposures already undergone resolution under Framework 1.0 (policy) may be considered for review of restructured conditions including extension of moratorium /repayment plan subject to maximum period of 24 months (including moratorium/extension of residual tenure under framework 1.0)

From the date of RBI Circular (May 5, 2021), any resolution necessitated on account of the economic fallout of Covid-19 pandemic, shall be undertaken only under this Framework.

• Borrowers will be considered for resolution plan based on a written request (including email) or raising request through call centre/ customer care detailing the financial stress faced by them due to Covid-19
• Borrowers will be asked to produce documents, such as income proof, Bank statements, any other such document deemed necessary for evaluation by Piramal Finance
• Resolution under this framework may be invoked not later than September 30, 2021 and must be finalised and implemented within 90 days from the date of invocation of the resolution process
• If any of the above timelines are breached at any point, the resolution process ceases to apply immediately in respect of the borrower concerned. Any resolution plan implemented in breach of the above stipulated timelines shall be fully governed by Prudential Framework for Resolution of Stressed Assets , dated June 7, 2019 or the relevant instructions where above Framework is not applicable in respect of specific category of lending institution viz, HFC, whereby they will be governed in terms of Para 8.3.2 of the Master direction – Non Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021; as if the resolution process was never invoked under this Framework

The Resolution Plan Shall Be Deemed To Be Implemented Only If All The Following Conditions Are Met:

• All related documentation, including execution of necessary agreements between Piramal Finance and borrower and collaterals provided, if any, are completed by the Company in consonance with the resolution plan being implemented
• The changes in the terms of conditions of the loans get duly reflected in the books of the Piramal Finance; and
• Borrower is not in default with the lending institution as per the revised terms

Upon finalization of the resolution plan, customer consent will be taken, and an agreement will be executed between the Piramal Finance and Borrower, detailing the terms and conditions of the resolution plan.