Under the pressure released by the RBI and Centre, banks have become lenient with their borrowers that faced sudden job loss or cut in salary. Lenders are directed to rescue individuals and small enterprises who been defaulting or are seen to default suddenly.

Banks are coming forward to help customers who have lost a job or suffered a salary cut or if the builder has overshot his delivery schedule. Borrowers may come across their lenders reducing the EMIs and extending the loan tenure. At the same time small enterprises that have been facing a crunch will also see a restructuring of their loans.

RBI has instructed banks to restructure loans of borrowers who had been regular in their payments until September 1st, 2008 but had started defaulting after that due to the difficulties.

Normally banks resort to loan recovery measures only after 90 days of the default date. RBI's notification states that the application for restructuring should be made by March 31st.

Vijaya Bank CMD, Albert Tauro said, "Home loans and SME (small and medium enterprise) loans are coming up most for restructuring. Some real estate developers too are making requests."

Chief General Manager agrees with Tauro's views and said, "We have received a fairly large number of applications for restructuring. Home loan borrowers come from good educational and professional backgrounds, so they have the intention to pay back their dues. It is just the difficult times that have compelled them to delay payments. So we are reducing the EMIs and increasing the tenure period. We tell them they can pay as much as they can now. Later, when their situation improves, we can restructure the loan again to what it was."

SBI plans to restructure nearly 50,000 SME accounts. However some of its officials expect around 1-2 lakh SME accounts to be restructured.

Nevertheless, this new approach will be a relief for many people who are facing difficulties due to job loss and economic slowdown.