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Loan restructuring is off to a slow start with banks reporting few requests till now and many customers dropping out once they understand the full modalities of the scheme.
Many lenders are also awaiting more clarity on how to proceed based on the Supreme Court order but most say there have been few requests till now.
Axis Bank Managing Director and CEO Amitabh Chaudhry, after announcing the second quarter results, said the bank had no restructuring request as of September 30.
Restructuring requests to public sector lenders, too, have been few till now. In a call after its second quarter results, Bank of Baroda Managing Director and CEO Sanjiv Chadha said the bank has received very few requests till now.
Earlier this month, State Bank of India’s newly-appointed Chairman, Dinesh Khara, had said that not many corporates had reached out for loan restructuring.
R Sridhar, Executive Vice-Chairman and CEO, IndoStar Capital Finance, said the requests for rescheduling of loans are lower than anticipated as collections had touched 90 per cent by September.
“I expect the remaining 10-15 per cent will seek rescheduling. We are examining individual cases and we decide on each case,” he said.
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Home and property loans largest in terms of value; consumer, personal loans by numberYES Bank’s Managing Director and CEO Prashant Kumar recently told BusinessLine that most requests are from corporate accounts as the bank has exposure to real estate and hospitality sectors while there are very few from MSME and retail segments.
“We are getting requests but we are also explaining to the customer that taking the facility is very easy but paying as per the restructuring would be very difficult,” he had said.
Under moratorium
Experts point out that given the robust collection data and the low number of customers under moratorium by the end of August, few would have sought the facility.
“Data indicate that in the salaried segments less than seven- eight per cent customers were still under moratorium by the end of August. In the self-employed category, the moratorium was at about 25- 30 per cent. If people had moved out of moratorium by August-end then they are in a position to pay their EMIs and don’t need a restructuring,” said Gaurav Gupta, CEO, MyLoanCare.in.
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Many banks and NBFCs have started talking to customers and explaining how the scheme will work. Some say customers are trying to repay the dues once they understand the impact of the scheme and that it could impact their credit score in the future.
With the facility open till the end of December, lenders are geared to meet more requests.
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