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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  • What is the timeline for Implementation of Resolution Plan ?

    The Resolution Plan to be implemented within maximum 180 days from the date of invocation.

    Date of invocation is the date on which both borrower and bank have agreed to proceed with a resolution plan under this framework.

    If the above timeline is breached at any point, the resolution process ceases to apply immediately in respect of the borrower concerned. Any resolution plan implemented in breach of the above stipulated timelines shall be fully governed by the extant Prudential Framework of RBI, as if the resolution process was never invoked under this resolution framework for COVID 19 related stress.

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  • Will there be any change in pricing of my loans?

    The ratios prescribed by RBI that are intended as floors or ceilings, as the case may be are as Annexure 1.

    Annexure- 1

    The ratios prescribed by RBI that are intended as floors or ceilings, as the case may be are as Annexure 1.

    SectorsTOL / ATNWTotal Debt / EBITDACurrent RatioAverage
    DSCRDSCR
    Auto Components<=><=>>= 1.00>= 1.20>= 1.00
    Auto Dealership< />< />>=1.00>=1.20>=1.00
    Automobile Manufacturing*<=><=>NA>= 1.20>= 1.00
    Aviation**<=><=>>= 0.40NANA
    Building Materials - Tiles< />< />>=1.00>=1.20>=1.00
    Cement< />< />>=1.00>=1.20>=1.00
    Chemicals< />< />>=1.00>=1.20>=1.00
    Construction< />< />>=1.00>=1.20>=1.00
    Consumer Durables / FMCG< />< />>=1.00>=1.20>=1.00
    Corporate Retails Outlets< />< />>=1.00>=1.20>=1.00
    Gems & Jewellery< />< />>=1.00>=1.20>=1.00
    Hotel, Restaurants, Tourism< />< />>= 1.00>=1.20>=1.00
    Iron & Steel Manufacturing< />< />>=1.00>=1.20>=1.00
    Logistics< />< />>=1.00>=1.20>=1.00
    Mining< />< />>=1.00>=1.20>=1.00
    Non Ferrous Metals< />< />>=1.00>=1.20>=1.00
    Pharmaceuticals Manufacturing< />< />>=1.00>=1.20>=1.00
    Plastic Products
    Manufacturing< />< />>=1.00>=1.20>=1.00
    Port & Port Services< />< />>=1.00>=1.20>=1.00
    Power
    - Generation< />< />>=1.00>=1.20>=1.00
    - Transmission< />< />>=1.00>=1.20>=1.00
    - Distribution< />< />>=1.00>=1.20>=1.00
    Real Estate##
    - Residential< />< />>=1.00>=1.20>=1.00
    - Commercial< />< />>=1.00>=1.20>=1.00
    RoadsNANANA>=1.10>=1.00
    Shipping< />< />>=1.00>=1.20>=1.00
    Sugar< />< />>=1.00>=1.20>=1.00
    Textiles< />< />>=1.00>=1.20>=1.00
    Trading - Wholesale @< />< />>=1.00Instead Interest Coverage Ratio > = 1.70
    Note on Financial Parameters

    Some of the key ratios have been marked as not applicable in the case of certain sectors in line with the recommendations of the Expert Committee which has concluded that those ratios may not be relevant for the respective sectors to which they have been made as not applicable.

    *No threshold has been prescribed for Current Ratio due to the “just in time inventory” business model for raw materials and parts, and finished goods inventory is funded by channel financing available from the dealers.

    **DSCR thresholds have not been prescribed since most of the airline companies work on refinancing of debt as a financing strategy. Consequently, average DSCR threshold is also not prescribed.

    ##In the roads sector, the financing is cash flow based and at SPV level where the level of debt is decided at the time of initial project appraisal. The working capital cycle in this sector is also negative. Accordingly, ratios like TOL / ATNW, Debt/EBITDA and Current ratio may not be relevant at the time of restructuring in this sector.

    @Most of the companies in the sector do not use long term debt for funding their operations and are unlisted. Hence DSCR and average DSCR may not be relevant for the sector.

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  • Whether any additional security will have to be furnished in case relief under the framework is sanctioned?

    In case of unlisted entities, Personal Guarantee of the promoters for the additional credit facilities to be mandatorily obtained, while the same shall be explored in case of listed companies. Pledge of shares by promoters shall be stipulated in case of listed entities.

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  • What is the timeline for Implementation of Resolution Plan ?

    Yes, the moratorium sanctioned under this Framework will be in addition to the moratorium granted, if any, by the Bank earlier.

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  • Whether there will be any change in Loan Instalments?

    Yes, on account of moratorium granted, the tenure of your loan can be extended by upto a maximum of 24 months and the instalments payable after the moratorium will be recalculated and advised by Bank.

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  • Will any Processing Fee need to be paid?

    Processing fee/ Upfront fee @0.25% of the aggregate limits will be payable.

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  • Will there be any change in pricing of my loans?

    Yes, there will be change in pricing to offset cost of additional provisions that the Bank is required to make for extending the benefits under this Resolution Framework. The pricing would be as under:

    FITL/WCTL/WCDL sanctioned under the Framework: 100 bps above your current pricing on Working Capital Loans.

    Additional Interest of 35 bps shall be charged for remaining tenure of the loan, in respect of Term loans, wherever restructuring is considered. Further, any concessions/Waiver provided during the resolution period shall result in right of recompense.

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  • General: COVID-19 Loan Moratorium

    In line with COVID 19 Regulatory Package announced by RBI the moratorium on payment of loan EMIs and Instalment /Interest under the COVID-19 regulatory package has expired on 31st August 2020.

    Your EMI/ monthly Instalment & Interest will be debited from September 2020 by the Bank as per schedule. You are requested to maintain sufficient balance in your account to avoid any default.

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  • Cash Credit/OD Accounts

    The accrued interest on working capital limits allowed in the form of CC/OD into FITL from 01.03.2020 to 31.05.2020 / 31.08.2020 (as the case may be) for borrowers where moratorium was allowed between 1st March 2020 and 31st August 2020.

    The repayment of these FITL accounts shall commence from 1st October 2020 in six equal monthly instalments. The interest on these FITL accounts shall also be recovered separately as and when debited in FITL account on monthly basis. The instalment and its interest will be recover from your operating account. Please arrange to have sufficient fund in your operating account.

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  • Term Loan

    The unpaid EMIs/interest of Non EMIs Term loan along with the accrued interest is added to balance outstanding and the loan tenor is extended accordingly keeping EMI as constant.

    In NON-EMI Term loans, the instalment and accrued interest for the period 01.03.2020 to 31.05.2020 / 31.08.2020 (as the case may be) shall be deferred for recovery after the end of the original tenor, thereby extending the repayment period accordingly. In addition, the interest for extended period shall also be recovered separately as and when due.

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  • Whether I need to pay entire pending EMIs in a single instance after 6 months of deferment, if opted by me?

    No, You may continue to pay your usual EMI/ instalments falling due from 1st September 2020 onwards as per the original repayment schedule. However, due to interest on EMI amount deferred, the number of EMIs will change accordingly.

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  • The increase in tenor resulted in increase in amount that I will be paying back to the Bank on my loan which seems to be more in comparison to Moratorium interest. How is the increase in EMI tenor calculated?

    The accrued interest have been added to balance outstanding. Hence the additional amount is the accrued interest on the unpaid EMI which you have to pay at the end of the loan tenor. However if you have adequate funds to pay the deferred EMI/Instalments/Interest during the moratorium period, you can pay to avoid any extra interest burden.

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  • Will deferment of EMI result in increase of my future EMI amount?

    You have to pay usual EMI/ instalments falling due from September 2020 onwards as per the original repayment schedule. However, due to interest on EMI/ instalment amount deferred, the number of EMIs may change during the extended period. There is no change in EMI.

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  • Whether I can pay the deferred EMI/Installment /Interest now.

    We encourage customers with adequate funds to pay the deferred EMI/Instalments/Interest during the moratorium period to avoid any extra interest burden. No pre-payment charges will be levied for early payment of interest/ instalments/ EMI.

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  • Will all these measures of RBI be treated as restructuring?

    No. It will not be treated as restructuring

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  • What is the Purpose of the scheme

    The purpose of the scheme is to provide immediate financial assistance to the SHGs to meet the emergent needs of its members for their domestic and agriculture purposes.

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  • Who can avail this facility

    The existing SHGs enjoying credit facilities from the Bank in the form of Cash Credit/Overdraft/Term Loan/Demand loan with satisfactory Loan record.

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  • Can a new SHG avail this scheme

    This scheme is only for the existing SHG enjoying credit facilities from the Bank.

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  • Is there any Moratorium period for this scheme

    Moratorium period is for 6 Month from the date of disbursement.

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  • Nature of Facility

    Loan under this scheme is a demand loan and repayable in 24 Months.

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  • What is the margin requirement for this scheme

    Nil (For Max limit up to Rs. 10 Lakhs).

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  • What is the maximum Loan amount given in the facility

    SHGs can avail a maximum of 30% of Existing Limit.

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  • What is the maximum loan amount that can be availed by per member of SHG

    Under this scheme loan amount shall not exceed Rs.1 Lac per member of the SHG.

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