Restructured Loan

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Restructured Loan

A loan for which the parties have agreed to alter the terms, usually to make them more favorable to the borrower. For example, the borrower may restructure a loan to receive a lower interest rate or monthly payment. Restructured loans are most common if the borrower states that he/she can no longer afford payments under the old terms. For example, a borrower may have to accept a new job with less income, forcing a tighter budget.
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Besides this, the cover pool is almost nine years-seasoned, and the majority of restructured loans are currently performing.
They are also not sure whether the new rules require them to get external ratings for all restructured loans.
1 per cent, the lowest since the introduction of the current classification methodology in December 2014, which provides for a minimum 12-month probation period of restructured loans before they are classified as performing, the bank supervisor said.
He said that the banks wanted to treat the restructured loans as regular loans which is not possible.
Moody's noted that banks' restructured loan balance declined to its lowest level since December 2014 and acknowledged that the lower balance reflects the larger amount of restructured loans that became performing and exited the restructured loan pool versus newly restructured loans entering the pool.
Global Banking News-November 23, 2016--Oman eases provisions for restructured loans
Thus, the holders of the restructured 13 issues of sovereign and sovereign-guaranteed Eurobonds, Eurobonds of the City of Kyiv as well as the creditors of the restructured loans to Ukravtodor and Yuzhnoye State Design Office who participated in the debt operation have already receive their coupon payments on the new notes.
India Ratings and Research, a unit of credit rating agency Fitch, expects banks to restructure loans worth between ` 60,000 crore and ` 1 lakh crore in the next five months with the Reserve Bank of India's ( RBI) new rules ending the difference between restructured loans and NPAs coming into effect from April FY15.
However, high credit concentrations and undisclosed levels of restructured loans will also continue to pose downside risks for the system.
For thrift and rural/cooperative banks in these areas the BSP is granting exclusion of existing loans of borrowers from the computation of past due ratios as well as reduction of the general loan loss provisions from five percent to just one percent for restructured loans.
While there are clear signs of improving asset quality matrixes analysts and rating agencies see restructured loans and potential defaults on these loans as a key source or risk.