Existing SBI customers who have availed special loans under the category of MSME are also eligible for this facility.
Borrowers can maximum avail 10 per cent of the existing fund based working capital limits, subject to a cap of Rs 200 crore. (Photo: IANS)
India’s largest lender State Bank of India became the first bank to open an emergency credit line to meet any liquidity mismatch for its borrowers affected by COVID-19 pandemic.
In a three-page circular issued on Friday, the state-run bank directed its chief general managers that an additional liquidity facility Covid-19 Emergency Credit Line (CECL), will provide funds up to Rs 200 crore and will be available till June 30, 2020. The loan will be offered at an interest rate of 7.25 per cent with a tenure of 12 months.
“With a view to provide some degree of relief to the borrowers whose operations are impacted by Covid-19, it is decided to make available additional liquidity credit facilities to the eligible borrowers by way of ad-hoc facilities — CECL to tide over the current crisis situation,” the bank said in a circular to all branches.
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The bank said the credit line is open for all standard accounts which have not been classified under the category of special mention accounts (SMA) 1 or 2 as on March 16, 2020 are eligible to avail this credit line.
Special Mention Accounts (SMA) was introduced to identify those accounts that have the potential to become an NPA/stressed asset. SMA-1 accounts are those where the overdue period is between 31 to 60 days. While in SMA -2 accounts overdue is between 61 to 90 days.
Additionally, existing SBI customers who have availed special loans under the category of MSME are also eligible for this facility.
Borrowers can maximum avail 10 per cent of the existing fund based working capital limits, subject to a cap of Rs 200 crore, the bank said.
According to a recent survey conducted by industry body, FICCI, over 50 per cent of companies in the country see impact of coronavirus on their operations.
Nearly 80 per cent businesses have witnessed decline in cash flows due to the global pandemic, it showed.
(With input from agencies)
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