More than dozen PSBs announce COVID-19 emergency credit line

More than a dozen public sector banks out have announced COVID-19 Emergency Credit Line to deal with the hardship faced by various sectors of the economy. Though public sectors banks (PSBs) were quick to respond with steps to deal with the hardship faced by various sectors of the economy, private sector banks such as ICICI Bank, HDFC Bank and Axis Bank are yet to come out with any relief measures for their customers.

As many as 15 PSBs out of the total 18 government-owned banks till Thursday evening announced schemes to mitigate hardship faced by various segments. Taking the lead, the country's largest lender SBI last week announced an emergency credit line to meet any liquidity mismatch for 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 June 30, SBI said in a circular issued on Friday.

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

"In wake of #CORONA virus Out break, #OBC supports all its existing borrowers by launching COVID19 Emergency Credit Facility which would help them meet temporary liquidity mismatch in operating cycle," Oriental Bank of Commerce said in a tweet on Thursday. Another public sector lender United Bank of India also launched a special scheme "UBI COVID-19 Emergency Credit Facility" for its existing MSME, agriculture and other business segment borrowers.

PSBs have announced schemes for existing MSME borrowers with some banks additionally extending schemes to other segments including agriculture, self-help groups, organised sector employees, a senior public sector bank official said. The quantum of loan is in the form of additional line of credit ranging from 10 per cent or higher of existing working capital limits, the official said adding that the banks have kept provision for creation of charge on existing securities for this additional facility without seeking any fresh requirement of prime or collateral security.

The loan schemes have a moratorium period of up to 6 months. The official further said the public sector banks are gearing up to do heavy lifting with regards to various direct benefit transfer scheme announced by Finance Minister Nirmala Sitharaman on Thursday.

Even state-owned financial institution SIDBI announced a concessional interest rate of 5 per cent for MSME under the SIDBI Assistance to Facilitate Emergency Response against coronavirus. The micro, small and medium enterprises that are into manufacturing of any products or providing any services related to fighting pandemic such as senitisers, masks, gloves and body suit ventilators will get loan at a concessional rate of 5 per cent, SDBI said in a statement.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)