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.
Based on income stream of the borrowers the resolution plan may include:
Note: Compromise settlements are not permitted as a resolution plan for this purpose.
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.
The following categories of borrowers are eligible
Borrowers shall need to meet all the below criteria as mentioned below
Note: The final decision on the eligible borrowers shall be with the Approving Authority
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.
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.
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.
Yes, housing loans are included under the Resolution Framework 2.0 for Covid-19 related stress.
Borrowers will be informed about the approval or rejection of their application for Resolution Framework 2.0 for Covid-19 related stress within 30 days of submitting their application.
Small business loans qualify under the Resolution Framework 2.0 for Covid-19-related stress. Small businesses involved in wholesale and retail trading are also eligible as long as they are not categorized as SMEs.
Depending on the income stream of the borrowers, the resolution plan supports tenor extensions, rescheduling of payments, and more.
Borrowers in default with the lending institution won’t qualify under the Resolution Framework 2.0 for Covid-19 related stress.