In view of the coronavirus epidemic, public sector banks such as Bank of India, Union Bank of India, UCO Bank and Indian Bank have announced emergency loans such as personal loans and line of credit for existing MSME customers and members of self-help groups. This decision has been taken after consultation with the Finance Ministry. It is expected that other banks too will soon follow this path and announce emergency loans.
Apart from this, public sector banks like Canara Bank, UCO Bank and Indian Overseas Bank have announced emergency line of credit for customers. Padmaja Chundru, managing director of India Bank, told news agency PTI, the bank is standing with its customers in this difficult time. For the difficult times that the various sectors of the economy are going through, we have launched some products to take care of the cash needs in retail customers and businesses.
Union Bank also said, “We are giving additional credit facility to customers in view of cash shortage, in which 10 percent of the working capital limit will be provided.” Banks are giving 12 months time for repayment at low interest rates.
Among the public sector public sector banks, State Bank of India (SBI) was the first bank to announce an emergency credit line. The bank issued a circular announcing that it will provide additional cash facility in the name of Covid-19 Emergency Credit Line (CECL). Funds up to 200 crore will be provided in it, which can be availed by the end of June. The bank will give loans for up to 7.25 percent interest for 12 months. This is a brilliant initiative, which other banks were expected to adopt. And what was expected was done and many banks have made this offer.