State Bank of India (SBI) has introduced emergency loan facility in view of the business being affected due to corona. This will meet the cash crunch of the customers.
The country’s largest bank has issued a circular on Friday. It says that additional cash facility has been introduced in the name of Covid-19 Emergency Credit Line (CECL).
An amount of up to Rs 200 crore will be provided. This feature will be available by June 30, 2020. The loan will be extended at an interest rate of 7.25 per cent for a period of 12 months.
In a circular sent to all branches, the bank said, the decision has been made to provide relief to some extent to the borrowers whose business has been affected by Covid-19.
Under this scheme, eligible borrowers will be provided additional loan service. CECL will help overcome the current crisis situation.
The bank said that the loan facility is available for all standard accounts which are not classified as SMA i.e. Special Mention Account 1 or 2 till March 16, 2020. The SMA was launched to identify accounts that are likely to become NPA (stranded debts) or pressurized assets.
In view of the corona virus, the Indian Banks’ Association (IBA) has sought several concessions from the Reserve Bank of India. This includes a demand to extend 90 days to classify accounts as NPAs.
Most analysts say the corona virus has had a very bad impact on small businesses. “Corona will affect the damage of business,” said Suresh Ganpat of Mac Wire. The impact will be seen in the first quarter of the financial year 2020-21. It will not be affected in the fourth quarter of the current financial year as problems in India have increased a week ago,” he said.
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