SBI Opens Emergency Credit Facility For COVID-19

The State Bank of India (SBI) became the first lender in the country to provide emergency credit facility for its existing borrowers affected by the coronavirus pandemic.

In a departmental circular to its branches, SBI said that the ad-hoc loan facility called 'COVID 19 Emergency Credit Line (CECL)' is aimed at meeting the temporary liquidity mismatch that could arise from the effects of COVID-19.

The scheme will be operational till 30 June 2020 and the maximum loan amount that can be availed it capped at Rs 200 crores or 10 percent of the existing fund-based working capital limits. The emergency loan facility is aimed at assisting MSME borrowers.

Loans will be made available at a flat rate of 7.25 percent.

All standard accounts which have not been classified under the category of special mention accounts 1 & 2 as on 16 March are eligible. Existing SBI customers who have availed special loan products under the MSME category can also avail this facility.

This loan facility shall be made available as Fund Based Limits only, SBI said.

The borrowers can avail the entire amount in one go and will be repayable in six instalments after a moratorium period of six months from the date of disbursement of the loan.

The lender will not prescribe margins for these loans, however, the proposed ad-hoc limits should be covered by the market value of the stocks and receivables as per the Stock statement, SBI said.