Banks Open Emergency COVID-19 Credit Lines To Businesses, Individuals

To help deal with the economic hardships faced by businesses and individuals in India, nearly all public sector banks have announced COVID-19 Emergency Credit Lines.

Among them, the State Bank of India (SBI) was the first to announced its emergency credit line last week to meet liquidity mismatch faced by its borrowers.

The additional liquidity facility COVID-19 Emergency Credit Line (CECL) will provide funds up to Rs 200 crore and will be available till 30 June, SBI said in a circular issued on 20 March.

Similarly, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India, Bank of India,Indian Bank, Bank of Maharashtra, Syndicate Bank, Indian Overseas Bank, UCO Bank and Andhra Bank have also introduced relief schemes for meeting liquidity requirements under COVID-19 emergency.

PSBs have announced schemes for existing MSME (micro, small and medium enterprises) borrowers with some banks additionally extending schemes to other segments including agriculture, self-help groups and organised sector employees.

The loan schemes have a moratorium period of up to 6 months.

For example, Indian Bank announced five special COVID-19 emergency loan schemes for its customers from salaried class, pensioners, self-help groups, MSMEs and large corporates. Its customers can avail a salary loan of up to 20 times of their last drawn monthly gross salary, with an upper limit of Rs 2 lakh.

For senior citizens, an emergency pension loan, 15 times their monthly pension, with an upper limit of Rs 2 lakh, can be borrowed. Its comes with a 5-year loan tenor and zero concessional interest or charges.

According to a PTI report, PSBs are also gearing up to do the heavy lifting with regards to various direct benefit transfer (DBT) schemes announced by Finance Minister Nirmala Sitharaman on Thursday.

State-owned financial institution SIDBI announced a concessional interest rate of 5 percent for MSME under the SIDBI Assistance to Facilitate Emergency Response against coronavirus.

According to its statement, MSMEs involved in manufacturing of any products or providing any services related to fighting the pandemic such as sanitisers, masks, gloves and bodysuit ventilators will get loans at a concessional rate of 5 percent.