Personal loans dominated Covid restructuring for HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, RBL Bank

The relatively large restructuring of HDFC Bank, according to Jimmy Tata, director of credit at the lender, followed after the system was opened to all who requested it. Much of it was precaution, he said.

In the early days, the bank had a process in place where the borrower had to demonstrate the need for restructuring and was only extended if there were signs of distress. “But as soon as it (the restructuring program) was opened and it was cleared on demand, we were much more willing to allow the restructuring, and that is pretty much reflected in the fact that a very much of it is not delinquent at this point in time, ”Tata told analysts.

In comparison, Axis Bank has refrained from restructuring much.

“… if there was a retail slippage due to Covid or what we went through last year, we did not rely on the restructuring or the amount of restructuring we did on the retail side Retail is minimal, ”Agent Amitabh Chaudhry told analysts after the bank’s results. “So everything that slipped must have slipped because there was no other mechanism we were using to manage our portfolio like that.”

As of March 31, the bank had restructured retail loans worth Rs 503 crore as part of the one-off restructuring plan, out of a total of Rs 844 crore.

Kotak Mahindra Bank has barely restructured the loans with the pool of this debt at Rs 95 crore. “The patchwork will not work and lenders have to face reality,” Uday Kotak, the bank’s chief executive, said during a media call when asked about the need for a new restructuring window. “The right approach is to face reality and take the impact on the chin.”

The smaller RBL bank restructured loans worth Rs 467 crore, which were wholly owned by its retail borrowers. Speaking to the press after announcing the quarterly results, CEO Vishwavir Ahuja said the losses came from his unsecured retail portfolio.


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