SBI COVID loan: State Bank of India opens emergency line of credit to help borrowers fight coronavirus

SBI COVID loan: Amid businesses hit by the novel coronavirus pandemic, the country’s largest lender, the State Bank of India (SBI) has opened an emergency line of credit to deal with any liquidity imbalance for its borrowers. The SBI COVID ad hoc credit line will be called “COVID 19” and will be available until June 30, 2020. SBI will charge an interest rate of 7.25% on the SBI COVID 19 loan.

All standard accounts as of March 16, 2020 and up to the date of sanction are eligible for the SBI COVID 19 loan. However, standard accounts classified as accounts with special mention – SMA 1 (overdue between 30 and 60 days) and SMA2 (overdue between 61 and 90 days) are not eligible for the credit facility.

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The maximum loan that could be used under this SBI’s emergency credit program is capped at Rs 200 crore. This special loan facility will be available as fund-based limits only, SBI said. The maximum weight of the fallout from COVID19 is suffered by commercial establishments.

By contacting all its branches, SBI said that the borrower can avail the sanctioned amount in one go. The facility will be treated as an exposure to the borrower. The Bank will adhere to the prudential standards and the market mechanism of the Reserve Bank of India for the granting of these ad hoc loans. The loans will have to be repaid in six equal monthly installments after a moratorium period of six months from the disbursement date of the SBI COVID 19 loan.

While SBI Bank has introduced an ad hoc loan to help SBI clients fight the spread of the coronavirus, SBI Card is not behind schedule either. SBI Card in a communication to customers said it ensures that services remain uninterrupted.

“With the situation worsening with each passing day, SBI Card has taken proactive steps to ensure uninterrupted services. Security protocols at all of our offices and contact points have been improved to combat this reported disaster,” said he said in an email to his customers on Saturday. (With PTI entries)