State Bank of India (SBI) has decided to extend the timeline for payment of settlement amount by three months due to the 21-day lockdown.
“SBI has come forward to extend the timeline for payment of settlement amount by three months. Now, customers, on-boarded under settlement scheme SBI OTS 2019 / Rin Samadhan 19-20/General compromise can meet payment obligation by June 30, 2020,” SBI said.
Under the One Time Settlement (OTS) 2019 scheme, the extension will be available only to those customers where the first two instalments of 5% / 15% and 20% / 25% have been received within the stipulated 30 and 60 days, respectively.
The balance OTS amount can be paid by June 30, it said, while adding it would not charge any interest on the amount for this extended period. Under the Rin Samadhan scheme, the timeline for receipt of acceptance of OTS proposal along with upfront payment from borrowers has been extended up to June 30, from the current March 31 and up to September 30 for recovery of the entire OTS amount.
“This will provide an extended opportunity to borrowers who are unable to visit branches owing to the lockdown,” SBI said.
Also, payment obligations for borrowers with outstanding as on March 01, 2020 under ‘General Compromise’ category has been extended by three months, without charging any interest for the additional period. On working capital loans, C.S. Setty, MD, SBI, said because firms have to pay interest on such loans at the end of the moratorium period, banks are evaluating the option of requesting the RBI for some relief in terms of asset classification. This is because these companies may not be in a position to repay immediately after the moratorium is lifted.
The RBI had allowed banks in respect of working capital facilities sanctioned in the form of cash credit or over draft to borrowers facing stress and said lenders may recalculate the ‘drawing power’ by reducing the margins or by reassessing the working capital cycle.
“This relief shall be available in respect of all such changes effected up to May 31, 2020 and shall be contingent on the lending institutions satisfying themselves that the same is necessitated on account of the economic fallout from COVID-19. Further, accounts provided relief under these instructions shall be subject to subsequent supervisory review with regard to their justifiability on account of the economic fallout from COVID-19,” the RBI had said.
