State Bank of India has said it will seek additional security in the form of personal guarantee of promoters of unlisted companies and ask promoters to pledge their shares for listed entities as part of the loan-restructuring process.
In its frequently asked questions (FAQs) on the resolution framework for Covid-19-related stress other than personal segment loans, SBI said a processing fee or upfront fee of 0.25 per cent of the aggregate limits will also be payable.
Further, for term loans and working capital loans, the interest cost would be increased by 100 basis points over the current pricing on working capital loans.
In case additional loan facilities are sanctioned by the bank, the promoter would be expected to infuse capital amounting to 10 per cent to 15 per cent of the additional loan sanctioned.
If the borrower has taken a loan from a consortium of lenders, then the resolution process will be treated as invoked in respect of any borrower 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.
Borrowers with loans of ₹1,500 crore and above can apply for the resolution scheme by November 11, while others can apply by November 30.
The scheme can be availed by all borrowers whose loans are ‘standard’ as on the date of application and should have been ‘standard’ and also not in default for more than 30 days as on March 1.
“Your unit’s operations should have been affected by Covid-19 pandemic as a result of which your cash flows or revenues have declined significantly and you are not in a position to service your loan instalments or debt,” it further said.
GST returns
To apply for the scheme, the company would have to provide a board resolution stating that its operations are under stress due to Covid-19, while others would have to submit an undertaking of the same. They would also have to provide GST returns from April 2020 till the latest available month and also for the corresponding period of the previous year. Listed companies will have to provide the latest financials filed with the stock exchanges.
In case of term loans, borrowers can get a moratorium of up to two years for repayment of instalments of principal, extension in the tenor of the loan by up to a maximum of two years, or interest moratorium up to a maximum of six months. The interest accrued during the moratorium period would be capitalised.
For working capital loans, interest moratorium of up to six months, which is repayable within a maximum period of two years or need-based additional funding, may be provided which would repayable in not more than five years.
SBI said the tenure of the loan would be extended by a maximum of 24 months.
However, MSME loans with aggregate exposure of less than ₹25 crore as on March 1, farm credit, loans to primary agricultural credit societies, Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi- Purpose Societies (LAMPS) for on-lending to agriculture, exposures to financial service providers, including NBFCs and exposures to Central and State Governments, Local Government bodies, will not be covered under the scheme.