COVID-19 crisis: Banks launch special emergency loans for customers
In a bid to help people and businesses affected in the wake of coronavirus outbreak, state-owned lenders including Indian Bank, Union Bank of India and Bank of Baroda on Wednesday announced special emergency loan products. Besides, other public sector lenders -- Canara Bank, UCO Bank and Indian Overseas Bank -- too announced emergency credit line for customers. Public sector banks with about 80 per cent of banking operation have taken steps to ensure the safety of its staff and uninterrupted banking services to customers.
“In these challenging times, the bank is committed to standing by its customers. Keeping in view the hardships faced by various sectors of the economy, we have launched products to take care of immediate liquidity requirement of businesses and retail customers," Indian Bank managing director Padmaja Chunduru said.
"In wake of #coronavirus outbreak, #UnionBankofIndia unstintingly supports all its existing customers with the launch of Covid Emergency Line of Credit (CELC) which provides additional credit facilities to tide over liquidity issues," Union Bank of India said in a tweet.
Another state-run lender Bank of India too announced an emergency line of credit for borrowers.
Bank of Baroda said it has set up an emergency credit line to provide funds to its existing MSME and corporate borrowers impacted by the outbreak of coronavirus.
This follows a similar additional funding facility announced by the country's largest lender State Bank of India for its borrowers, last week.
"Canara Bank announces special Loan schemes for our MSME/Corporate/Business/ Agri & Retail Customers, to tide over the liquidity / Cash flow mismatches in the wake of the outbreak of COVID -19," the bank tweeted.
Indian Overseas Bank launched MSME Product "COVID 19 Line of Support Scheme" for all MSME customers.
More banks to follow suit and announce special emergency credit line in days to come.
Last week, the country's largest lender State Bank of India also announced an emergency credit line to meet any liquidity mismatch for its borrowers.
Sharing details, she said, IND- COVID Emergency Credit Line (IBCECL) for large corporates will provide additional funding of up to 10 per cent of the Working Capital Limits (both Fund Based and Non-Fund Based limits) with a maximum limit of Rs 100 crore.
Large Corporates and Medium Enterprises that are in the Standard Category would be eligible for this loan, she said, adding the loan tenor will be for 36 months with an initial moratorium of up to 6 months and would carry a fixed interest rate of 1-year MCLR.
For the MSME sector, she said, IND- MSE COVID Emergency Loan is aimed at providing additional funding of 10 per cent of fund-based working capital limits with max Rs 50 lakhs.
The will have tenure of up to 60 months and there will not be any processing fee.
To support the women workforce, the bank has launched the SHG-COVID - SAHAYA LOAN. Under this, each member can avail a soft loan of Rs 5000 up to a maximum of Rs 1 lakh per SHG. The loan is for 36 months with 6 months moratorium.
Indian Bank is servicing 1.68 lakh SHGs with more than 22 lakh women beneficiaries and the product will help them tide over the crisis, she said.
For salaried class, the bank has designed IND-COVID Emergency Salary Loan under which one can avail loan up to an amount equivalent to 20 times latest monthly gross salary subject to a max of Rs 2 lakhs.
Available at a concessional rate, this will help meet urgent medical and other expenditure, she said.
"We expect that these credit lines will meet the immediate liquidity requirements of businesses. SHGs has always been an important part of our business and with our initiatives, we ensure that the group gets all the desired support for financial independence. We have made these loans repayable over a longer period of time to give them the flexibility in operations until the business is back on track again. With salaried class and the pensioners, it is more a line to meet their immediate requirements,” she said.
Talking about efforts made by the bank to keep its staff safe, Chunduru said, the bank is deploying 50 per cent staff on an alternate basis.
Besides, she said, masks, sanitizers are being ensured and a helpline number manned by a team of doctors has been started for staff and their families to address the query related to the disease.
She said the bank is also identifying non-critical roles would be identified to enable implementation of the work-from-home policy.
The bank is also dissuading its customers not to visit bank branches and do the transaction through Digital Banking Services (DBS) in order to protect themselves from the coronavirus.
The bank is promoting digital payments such as mobile banking, internet banking, debit and credit cards instead of using cash which may require them to go to crowded places for paying bills.
To familiarise people about digital payment methods, she said, the bank has designed videos which inform customers about step by step use.
For pensioners, she said, the bank is taking extra effort to provide cash at their doorstep as these people are more prone to virus attack.
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