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Restructuring 2.0 to repay your loan.

The second wave of COVID-19 is still continuing to severely affect the Indian markets. Due to lockdowns many businesses are on the verge of shutting down. The Reserve Bank of India has been monitoring the emerging COVID-19 situation and also came up with measures to help business entities, and institutions in this crisis.
The fact that all the borrowers are not in a position to start paying the EMI’s on time, RBI has asked the lender banks to restructure the loan citing the RBI’s restructuring 2.0 circular.
Even though actual restructuring will depend on the case to case basis based on conditions set by the lender. Those who had not availed the re-structuring 1.0 can now avail of the restructuring 2.0 if the loan amount is up to Rs 25 crore. The loans are required to be classified as standard loans as on March 31, 2021 and all banks and lending institutions will have to revoke the scheme anytime up to September 30, 2021. Even those who had availed re-structuring 1.0 where the resolution plan permitted a moratorium of less than two years, lending institutions are being permitted to use this window to modify such plans to the extent of increasing the period of moratorium up to a total of 2 years. Keeping remaining conditions unchanged.

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