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PSBs unveil emergency line of credit to aid borrowers reeling under virus

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BoB has rolled out Baroda COVID-19 Emergency Credit Line (BCECL) to provide emergency credit line in the nature of short-term loan or demand loan to existing MSME and corporate borrowers affected by the coronavirus. (File Photo)

After SBI’s COVID-19 Emergency Credit Line (CECL), public sector banks (PSBs) Bank of Baroda (BoB), Indian Bank, Union Bank of India and Bank of India (BoI) have unveiled similar emergency credit lines at concessional terms to borrowers whose operations are hit by the coronavirus pandemic.

Banking sources said more PSBs are likely to come with similar schemes in the coming days to bail out borrowers and needy customers, in the wake of the overall decline in the business.

BoB has rolled out Baroda COVID-19 Emergency Credit Line (BCECL) to provide emergency credit line in the nature of short-term loan or demand loan to existing MSME and corporate borrowers affected by the coronavirus. The bank has decided to make maximum 10 per cent of the existing fund based working capital limits (FBWC) subject to maximum of Rs 200 crore.

BoB said the interest rate for corporate borrowers would be one-year MCLR of 8.15 per cent without the standard premium and for MSMEs, the interest rate would be at repo-linked lending rate of 8 per cent. “We hope the additional liquidity facility CECL will offer the requisite support to our customers to smoothly tide over the financial distress,” said Vikramaditya Singh Khichi, Executive Director, BoB.

BoI has proposed a loan product COVID Emergency Support Scheme (CESS 2020) and a personal loan product COVID-19 Personal Loan, valid up to June 30. Corporates will be eligible for an additional 20 per cent of their existing current working capital limit under CESS 2020. In the case of personal loans, additional loans of up to three times last drawn salary will be made available for those with accounts in BoI, up to a maximum limit of Rs 5 lakh.

Indian Bank has come out with emergency loans for various categories of customers — corporates, MSMEs, retail borrowers, pensioners and self-help groups (SHGs). Large corporates will get additional funding of up to 10 per cent of the working capital limits with a maximum limit of Rs 100 crore. Salaried employees will get an amount equal to 20 times the latest monthly gross salary subject to a maximum of Rs 2 lakh to meet urgent medical and other expenditures. For SHGs, each member can avail of a soft loan of Rs 5,000 — Rs 1 lakh per SHG — for 36 months with six months moratorium.

Union Bank of India has launched COVID-19 Emergency Line of Credit (CELC) for existing customers. Maximum 10 pet cent of the existing working capital limit will be provided under CELC, with repayment period of 36 months including maximum moratorium of 12 months at a fixed interest rate of 8 per cent.

State Bank of India (SBI) last week said it will make additional credit available under its CECL scheme to existing borrowers on an ad-hoc basis. This scheme will be in force up to June 30.

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