Loan Restructuring

Axis Bank Loan Restructuring Scheme

Axis Bank Loan Restructuring Scheme

Last Updated : Oct. 5, 2020, 3:30 p.m.

Keeping in line with the Reserve Bank of India’s (RBI) Resolution Plan for borrowers affected financially by the COVID-19 pandemic, Axis Bank has also provided its own Resolution Framework. This framework is rolled out to help borrowers by restructuring their loans and other credit facilities. With the Axis Bank Loan Restructuring Scheme, borrowers can extend their overall tenure by a maximum of 24 months. This extension will help people, who are facing economic stress, get the much-needed relief by reducing their EMI amount.

However, not every borrower will be eligible for the Axis Bank loan restructuring. After assessing the overall income loss or any other impact caused by COVID-19, the bank will make the final decision. So, if you are an Axis Bank customer and are facing loan payment issues due to COVID-related stress, read this article where we will discuss everything related to the Axis Bank Loan Restructuring Scheme, Eligibility, Application Process, and other important details. Keep reading!

Axis Bank Loan Restructuring Scheme Benefits

So, what are the benefits that a borrower will get through Axis Bank Restructuring Scheme? Well, customers can get the benefits on Loans (Term and Overdraft) as well as on Credit Cards. We are showing some of the important benefits that a customer will get through this scheme. Please have a look.

  • Customers who have Term loans can reschedule their payments with Axis Bank Restructuring Scheme. Simply put, the balance tenure of the loan can be extended by a maximum of 24 months. This extension will help reduce the EMI amount. Other than this, customers can also rebook their loans in which they can close their existing loans and create a new loan. In this case, too, the maximum tenure can be increased by upto 2 years.
  • Customers having Overdraft Facilities can convert the accumulated interest till now or be accumulated, into some other credit facility, by upto a maximum tenure of 24 months.
  • The bank will provide a Moratorium Period for a maximum of 24 months. Also, this Moratorium will come into effect immediately after the implementation of the Resolution Plan. Remember that when you choose to extend your loan tenure, you may end up paying a higher interest amount.
  • Apart from Loans, customers can also restructure their credit card loans and their outstanding balances. Customers can get the entire credit card balance including the loan within the credit limit restructured and converted into a separate loan account.
  • The minimum Outstanding Balance on a Loan or Credit Card should be INR 50,000. Any amount lesser than this won’t be eligible for the Axis Bank Loan Restructuring Scheme.
  • There will be no change in the Interest Rate on your loan when you apply for a Restructuring Scheme. The interest rates will remain the same as before. The bank will charge a One-time Processing Fee to restructure your loan or credit card outstanding balance.

Axis Bank Loan Restructuring Scheme Eligibility

As we said earlier, not everyone will be eligible for the Axis Bank Loan Restructuring Scheme. Axis Bank has put a few conditions that a customer needs to fulfill. We are showing all of them below. Do check.

  • The first and foremost condition to be eligible for the Loan Restructuring is that all borrowers’ accounts should not have a default for more than 30 days as of March 1, 2020. Also, they should be classified as ‘Standard Assets’ across all Loans, Credit Facilities and Credit Cards to date.
  • Borrowers must have been affected financially by the COVID-19 pandemic. Borrowers need to submit proper evidence that can show the impact on Business or Source of Funds or Monthly Income.
  • Some of the examples of the economic impacts are Job Loss or Salary Cut or Variation in Cash Flows, difficulties in making payments due to emergency expenses or medical expenses.
  • If a borrower has been facing delay in the construction of the property being purchased and cash flows are being impacted due to this, he or she would also be eligible.
  • To authenticate the reduction of income and the financial impact on the borrower, Axis Bank will review the documents and information provided by the borrower. The bank will also check if a borrower will be able to pay the Restructured EMI before offering him or her the scheme.

Which Types of Loans Will be Covered Under the Axis Bank Loan Restructuring Scheme?

Before applying for the Axis Bank Loan Restructuring Scheme, it is important to know the loans that will be covered under this. Under the bank’s Resolution Framework, individual borrowers who have taken the Personal Loan can restructure their loans. Here, personal loans mean loans sanctioned for personal needs and not for business or commercial needs.

We are showing all the loans that will get covered under this scheme. Please check.

  • Credit Card Receivables
  • Personal Loans secured by Gold, Gold Jewellery, Immovable Property, Fixed Deposits, Shares, and Bonds, etc.
  • Personal Loans to Professionals ( other than loans for Business purposes)
  • Auto Loans (2-wheeler and 4-wheeler Loans)
  • Loans given for other consumption purposes for example Social Ceremonies, etc.
  • Education Loans
  • Loans provided for Investments in Financial Assets
  • Loans given for the Creation/Enhancement of Immovable Assets (Housing Loans)

What Type of Loans will not be Covered under the Axis Bank Loan Restructuring Scheme?

Now you have known which loans are covered under this scheme, you should also know the categories of borrowers or credit facilities that will not be eligible. All of them are shown below. Please check.

  • Current Employees of Axis Bank
  • MSME Borrowers whose overall loan exposure to lending institutions is INR 25 crore or less as of March 1, 2020. This will be covered under a separate scheme of RBI.
  • Any kind of Farm Credit
  • Exposures to Financial Service Providers
  • Consumption Loans to Farmers under Kisan Credit Card (KCC)
  • All kind of NPA Loans until March 1, 2020
  • Loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS)
  • Loans with a ‘Days Past Due’ (DPD) Status of more than 30 days on March 1, 2020
  • Accounts having Financial Difficulty due to reasons other than COVID-19

Required Documents for Axis Bank Loan Restructuring Scheme

While applying for the Loan Restructuring Scheme, customers need to submit a few documents along with the Request Letter. All these documents should be self-attested. Axis Bank will assess the eligibility of an application based on these documents. We are showing all the required documents for Salaried and Self-employed borrowers. Do check.

For Salaried Borrowers

  • KYC Documents of both Borrowers and Guarantors (Voter ID, Passport, Aadhar Card, etc.)
  • Last 12-months Bank Statements for all Loan Applicants
  • Salary Slips of the last 6 months
  • Last 2 year ITR and Form 16 for the latest year
  • In the case of Job Loss/ Salary Cut/ Deferment – Letter from your Employer about the Termination of Employment/ Salary Cut/ Deferment

For Self-employed Borrowers

  • KYC Documents of Borrowers, Guarantors, and Beneficial Owners (BO)
  • Business Bank Statements for the last 12 months for all applicants
  • GST Returns for the financial year (FY) 2019-20 and from April 2020 to till date or Form 26AS for FY 2019-20 and FY 2020-21
  • Audited Financials along with ITRs for FY 2019
  • Board Resolution for Applying for Loan Restructuring

How to Apply for Axis Bank Loan Reconstructing Scheme?

After knowing the loans that are eligible for restructuring and the documents that you will need to submit, it’s important to know the process by which you can apply for the Axis Bank Loan Restructuring Scheme.

Well, to apply for this scheme, borrowers (both salaried and self-employed) need to visit the nearest loan center with the Application/Request Letter and Required Documents. To download the application or Request Letter and Documents List, borrowers need to visit the official website of the Axis Bank and go to the ‘Resolution Framework’ section.

In the case of Credit Cards, customers need to visit the official website of Axis Bank where they can download the Restructuring Request Application and submit it to the nearest branch of the lender along with the required documents. The bank will make the final decision about the loan restructuring within 15 days of receiving the application.

Borrowers must apply for the loan restructuring scheme on or before December 20, 2020.

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