May 20, 2020
Covid-19 special emergency line of credit
Present lockdown due to corona virus pandemic some PSU banks offered a special type of loan category to meet out emergency funds for day to day capital needs such as consumption and medical need. The main aim of the COVID-19 loan is to tackle cash flow disruptions. Covid-19 loan primarily referred to existing borrowers/customers. Many PSU banks like Union Bank of India, Bank of India, Bank of Baroda, Punjab National Bank, and Bank of Maharashtra have launched covid-19 emergency loans including a personal loan with relaxed norms. Union Bank of India offered covid-19 agriculture loans and personal loans for farmers and retail borrowers/customers with an attractive rate of interest starting from @ 7.20 % to 8% and flexible repayment period from 2 – 5 years including 3 to 6 month moratorium period.
The beneficiary of covid-19 loans?
Existing borrowers/customers can take advantage of mitigating liquidity problems and cash flow disruptions.
Rate of interest offered on covid-19 loan?
Various PSU banks offered a different type of interest rate on covid-19 loans. Please refer to your bank website for a clear direction. Union Bank of India offered @7.20 percent for personal loans to 8% for agriculture loans.
Who are eligible for covid-19 loans?
One or more PSU bank providing retail loans to it is existing housing loan, car loan, personal loan borrowers. For personal loans, some banks required 6 – 12 months of salary credited in that particular Bank and existing retail loan borrowers with satisfactory repayment history of 12 months and above.
Process of covid-19 emergency loans?
For keeping in mind of making lockdown successful one or more banks offered processing of covid-19 loan over telephonic talk. So customers need not rush towards banks. Some banks also offered zero processing charges with two months relaxed documentation procedure so that after lockdown borrower can fulfill documentation and extension of existing charged property.
Should one take advantage of the covid-19 loan?
Present uncertainty and temporary cash flow mismatch at ongoing lockdown condition some middle-class salaried person and small business owner can take benefit of this emergency line of credit to rescue, survive and grow at the present worse economic condition.
However, if anyone has sufficient cash flow and doesn’t face a liquidity crunch at present, they should abstain from caring for additional liability.
Here is a quick chart overview of covid-19 loans offered by some of the many Indian Banks and their specification.
Source: Bank Website
Note: Some rumors spread about the SBI covid-19 emergency line of credit, which was clarified by Bank Management. For more information and detailed circular of the covid-19 emergency line of credit one should visit their respective bank’s official website or telephonic talk to customer care and/or respective branch.
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