In the view of Coronavirus pandemic, government-owned lenders such as lenders 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 their existing MSME borrowers and the self-help group members. This decision has been taken in consultation with the ministry of finance. It is expected that more banks will follow the same footsteps and announce emergency loans.
After the government-owned lenders, other public sector lenders such as- Canara Bank, UCO Bank, and Indian Overseas Bank – have also announced an emergency credit line for their 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 requirements of businesses and retail customers,” Indian Bank Managing Director Padmaja Chunduru told PTI.
“This is a special facility at the time of crisis and therefore we are offering this at the existing lending rate. In normal times, banks charge a higher rate for additional loan limit,” said Uco Bank chief executive AK Goel.
“In wake of #coronavirus outbreak, #UnionBankofIndia unstintingly supports all its existing customers with the launch of COVID Emergency Line of Credit which provides additional credit facilities to tide over liquidity issues,” Union Bank of India said this through a tweet.
Union Bank of India also said- it is providing additional credit facilities to tide over liquidity issues for its customers, under which 10 percent of the working capital limit will be provided. For repayment, the bank is giving a tenure of 12 months, at lower rates of interest.
SBI was the first among the government-owned public sector banks to announce such an emergency credit line. The bank announced in a circular that the bank will be providing additional liquidity facility COVID-19 Emergency Credit Line (CECL), which will provide funds up to ₹ 200 crores, these funds can be availed till June-end. The bank has offered loans at an interest rate of 7.25 percent, for a tenure period of 12 months. This was a great initiative that was expected to be followed by other PSU banks. Well, the expected happened and several other banks have followed the suit.