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COVID-19 Crisis: Banks to offer emergency funds to aid pensioners, salaried, self-help groups, MSME, large corporates

Priyadarshini Maji
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The government has notified all state-owned lenders to offer emergency credit lines to corporate borrowers. This is to tackle the fallout from the coronavirus (COVID-19) outbreak that has stranded business across the globe. Some public sector banks have stepped up to help tide over the Covid-19 crisis, with emergency funds to aid companies, both small and large, to continue their operations.

One of the first was India’s largest lender State Bank of India (SBI), who rolled out an emergency credit line. With the SBI credit line, borrowers can avail up to 10 per cent of their existing fund-based limits up to a maximum of Rs 100 crore. These loans come with a tenure of 6 months and could be repaid at a concessional rate of 7.25 per cent.

Following suit, Uco Bank, Indian Bank, Bank of India, and Union Bank of India have also announced emergency credit lines for their existing MSME borrowers. Indian Bank has offered 5 special COVID-19 emergency loan schemes for its all types of customers from pensioners, to salaried class, self-help groups, MSMEs as well as large corporates. Borrowers can avail of a salary loan of up to 20 times of his/her last drawn monthly gross salary, up to Rs 2 lakh. Emergency pension loans can also be availed by senior citizens, up to 15 times their monthly pension, capped at Rs 2 lakh. These special loans will come with a tenure of 5-years at zero concessional interest or charges.

Salaried borrowers looking for some emergency fund can opt for these instant credit options:

Instant loans are a popular credit option, especially among youngsters and millennials. These are different from personal loans because of the amount of loan. As compared to personal loans, instant loans usually offer a smaller amount to borrowers. These are in the form of advanced salary loans, rental loans, etc. given to individuals in need.

As the name suggests, the money is instantly made available to the borrower. While some disburse the money within a day, some give it within half a day, and some within a few hours. Instant loans are generally for a short period of time for short-term expenses, offered by digital lenders including MoneyTap, EarlySalary, LoanTap, PaySense, Qbera, etc. The amount of the loan is offered up to a certain percentage of the borrower’s salary and comes with a tenure ranging from 1-12 months. With the varying types of loans, some platforms offer around a 3-month interest-only payment option to borrowers.

These instant loan options are a great option for borrowers with no credit score or poor credit score, who are turned down by banks. Borrowers with low credit scores, as low as 600, are also offered loans by these instant credit platforms.