Frequently Asked Questions (FAQs)

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Resolution Framework 2.0 for COVID-19 related Stress to Individuals & Small Businesses
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  • Why this Resolution Framework is provided?

    This Resolution Framework is to provide relief to the borrowers adversely affected due to the COVID-19 pandemic and its resurgence in recent past.

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  • Whether all type of loan given to individual borrowers are covered under this Framework?

    The following loans given to individual borrowers are covered under the Framework: Baroda Home Loan, Baroda Top-up Loan, Baroda Auto Loans, Baroda Education Loans, Baroda Mortgage Loans, Baroda Personal Loans, Baroda Loans against Future Rent Receivables, Baroda advance against LIP, Baroda Loans against Gold Ornaments/ Jewellery, loan to individuals for business, a loan to business entity not exceeding in aggregate above Rs. 25.00 crs & not fall under MSME category.

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  • Whether every borrower is eligible for Resolution under this framework?

    Borrowers who are impacted financially due to COVID-19 & who’s accounts were standard as on 31.03.21 and on the date of invocation.

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  • I have taken loan from the Bank after 31st March 2021 and adversely affected due to COVID-19 pandemic. Whether I am eligible for the resolution?

    No, Loans availed on or before 31.03.2021, are only eligible for resolution under this Framework

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  • What are the eligibility criteria for the resolution framework?
    • Borrower’s loan must be “Standard” as on 31.03.2021.
    • The Loan account should be a “Standard Account” as on the date of application for relief under this framework i.e. date of invocation.
    • Borrower/ their close relative must be COVID 19 impacted and/ or their income must have been adversely affected due to COVID-19 pandemic and fulfil other eligibility criteria such as reduction in income, maintenance of Loan to Value norms, maximum age norms, repayment capacity norms, etc

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  • By what date, can I apply for this benefit?

    As per extant regulations, the resolution plan should be invoked maximum upto 30.09.2021. Therefore, you are required to apply at least -7- days before the last allowable date of invocation. Please note that your account should standard as on the date of application.
    We advise you to connect with your base Branch at the earliest to avoid last moment rush.

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  • By what time, do I need to complete all formalities to avail benefit?

    You need to complete all formalities of terms of sanction such as execution of documentations, etc. within 90 days from the date of your application subject to approval of resolution plan by the Bank.

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  • How can I apply for relief under above Framework.

    You can visit the Branch where your account is maintained and submit the application.

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  • How to check my eligibility for resolution?

    Contact your Base Branch or refer detailed policy documents available on Bank’s website.

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  • I am having Home Loan and Car loan facility with the Bank, can I avail benefit in both the accounts?

    Yes, you may avail benefit under resolution framework in all retail & small business loan accounts with the bank, subject to your overall eligibility.

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  • I have availed benefit under Resolution Framework 1.0, whether I can avail benefit in the Resolution Framework 2.0 also?

    You may also avail benefit under the new Resolution Framework 2.0 subject to the overall cap on moratorium and/ or extension of residual tenor provided in Resolution Framework 1.0 and this Framework combined shall be two years.

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  • I have availed benefit under resolution framework, can I avail any other fresh credit facility from the Bank?

    Yes, subject to fulfilment of eligibility criteria as per Bank’s extant guidelines.

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  • I have availed moratorium given by the Bank under regulatory package in the month of March-2020 and June 2020, whether I can avail benefits under this Resolution Framework?

    Yes.

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  • I have availed relief under the resolution framework and now have surplus funds, can I pay excess amount as against the revised repayment schedule? Any prepayment charges are applicable?

    Yes, it is always up to you. No pre-payment charges are applicable for retail loans given to individuals.

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  • In how many days after my application Bank will inform its decision?

    Bank will convey its decision to you within 30 days from the date of your application.

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  • In my loan, there are two co-borrowers and two guarantors, whether consent of all these individuals are also required to avail benefit under resolution plan?

    Yes, consent of all applicants/ co-applicants/ guarantors are required to avail resolution under the framework and they are required to sign the legal restructuring agreement/ documents.

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  • May I apply for refund of any interest/ instalments paid by me on or after 31.03.2021 till the date of implementation of resolution plan?

    No.

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  • What are the documents required to apply under resolution framework?

    Application form along with, necessary declaration/ documents reflecting stress due to COVID-19 on health / income of the borrowers / their family members.

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  • What do you mean by moratorium?

    During the moratorium period, borrower may choose not to pay principal and interest. In case of interest moratorium same will be accrued and required to be paid in remaining rescheduled repayment period.
    Please note this moratorium is different from the moratorium provided by the Reserve Bank of India under regulatory package during 01.03.2020 to 31.08.2020.

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  • What kind of relaxations are available under the Framework?

    For Loans accounts

    • Rescheduling of instalments with or without moratorium and with or without extension of period maximum upto -24- months.
    • Moratorium with or without extension of period maximum upto -24- months.
    For overdraft accounts:

    Conversion of interest/ charges into separate loan accounts for maximum period of -24- months. Repayment of such carved out loan can be done maximum within -24- months.

    For Working Capital:

    Re-assessment of working capital based on operating cycle & concessional margin
    No additional funding will be available under the resolution framework.

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  • What will be the impact on my EMI?

    Your EMI will be changed as per the resolution/ relaxation opted by you. It will be increased in case of moratorium availed. Revised repayment scheduled and EMI will be advised to you at the time of invocation.

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  • Whether I have to pay any processing fee or any additional charges under resolution framework?

    No processing charges are applicable under resolution framework. However, any out of pocket expenses for invocation and implementation (if any) to be borne by you. An additional interest of 0.35% p.a. on secured loans and 0.50% p.a. on unsecured loans will be applicable over and above your current Rate of interest for the remaining period of the loan.

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  • Whether opting for the resolution under framework will have an impact on my credit bureau?

    As per RBI guidelines, your loan/credit facility will be reported to the credit bureau as “Restructured due to COVID-19” and your credit scoring will be done by the Credit information Companies accordingly.

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  • What are the eligibility conditions to qualify for relief under the Framework?

    To be eligible under the Framework, the following eligibility conditions need to be fulfilled by the entity:

    • Loan should be a “Standard Account” as on date of application and should have been ‘Standard’ and also not in default for more than 30 days as on 01.03.2020.
    • Operations of the entity should have been affected by Covid-19 pandemic as a result of which revenues/profitability/Capacity utilisation have declined substantially or Operating cycle has substantially increased compared with pre-Covid period and you are not in a position to service your loan instalments/ debt without the relief under the Framework

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  • What documents do I need to provide along with application for being considered for relief under this Framework?

    You need to submit the following documents along with application / request letter:s

    • Board Resolution (in case of companies) stating that the Company’s operations are under stress on account of Covid-19. In case of other applicants (other than companies), borrower to declare in the request letter that unit’s operations are under stress on account of COVID-19.
    • GST returns from April 2020 till the latest available month and also for the corresponding period of the previous year.
    • In case of listed companies, the latest financials filed with Stock Exchanges to be submitted.
    • Projected financials (including Cash flows statement) for the period of loan.
    • Any other document as advised by your Branch/Relationship Manager.

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  • Whether Term loan and working capital facility both are eligible for relief under the Framework?

    Yes, Both term loan and working capital facility are eligible for relief under the framework

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  • Which are the Loans not covered under this Framework of RBI?

    The following loans are not covered under this Framework:

    • MSME borrowers whose aggregate exposure to lending institutions collectively, is Rs.25 crore or less as on March 1, 2020. (covered under separate scheme of RBI)
    • Farm credit
    • Loans to Primary Agricultural Credit Societies (PACS), Farmers' Service Societies (FSS) and Large-sized Adivasi Multi- Purpose Societies (LAMPS) for on-lending to agriculture.
    • Exposures to financial service providers including NBFCs.
    • Exposures to Central and State Governments, Local Government bodies (e.g. Municipal Corporations) and body corporates established by an Act of Parliament or State Legislature.

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  • How to apply for relief under above Framework?

    You can submit your request at the Branch where your account is maintained or alternatively contact your Relationship Manager and submit your request with required data/papers /documents.

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  • If additional loan facilities are sanctioned by the Bank, whether any capital has to be infused by the promoters?

    Minimum Promoter’s Contribution (capital infusion) of 10- 15% of the additional loan facilities sanctioned has to be brought in.

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  • Is Independent Credit Evaluation (ICE) of the Resolution Plan (RP) by External Credit Agencies mandatory?

    Independent Credit Evaluation(ICE) of the Resolution Plan (RP) by any one RBI accredited Rating Agency under the Prudential Framework will be required in respect of accounts where aggregate exposure exceeds Rs.100 crores from lending institutions. Only such RPs (resolution plans) which get a credit opinion of RP4 or better shall be considered for implementation.

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  • What are the relief/relaxations available under the Framework in case of Working Capital Loans?

    The following relief/relaxations are available in case of working capital loans, subject to compliance of bank norms:

    • Conversion of irregular portion in the account as Working Capital Term loan, which shall be repayable in maximum period of 2 years.
    • Interest moratorium of up to 6 months may be considered. Interest for the moratorium period may be converted into FITL, repayable within a maximum period of 2 years.
    • Need based additional funding may be provided which shall be repayable in not more than 5 years.

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  • What are the relief/relaxations available under the Framework in case of Term Loans?

    The following relief/relaxations are available in case of Term Loans, subject to compliance of bank norms:

    • Interest moratorium may be given up to a maximum of 6 months. The interest accrued during the moratorium period may be capitalized.
    • Moratorium of up to 2 years can be considered for repayment of instalments of principal.
    • Increasing the tenor of the loan by up to a maximum of 2 years including moratorium can be considered.
    • In all the steps enumerated above, the repayment period can be extended only up to a maximum of 2 years including moratorium.
    • For Project Loans, the tail period shall be taken into account while Rescheduling / Rephasing the instalments

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  • What is the last date to apply for relief under the Framework?

    For loans with aggregate exposure of Rs.1500 crores & above from the banking system, on or before by 15.11.2020.

    For others, the last date to apply for relief under the Framework is 30.11.2020 (However, it would be advisable to submit your applications on or before 15.11.2020).

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  • How do I send money to people? Do they need Baroda M CLIP wallet too?What is the process of availing relief if I am banking with a Consortium or under Multiple banking arrangement?

    If you are availing credit facilities under Consortium/ Multiple banking arrangement, the resolution process shall be treated as invoked if lending institutions representing 75 per cent by value of the total outstanding credit facilities (fund based as well non-fund based) and not less than 60 per cent of lending institutions by number agree to invoke the same.

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