Emergency aid by banks amidst COVID-19 outbreak

The coronavirus outbreak has forced temporary closure on many businesses, affecting their cash flows. Many banks have introduced liquidity measures to help business tide over the crisis and carry on operations. The government has asked all public sector banks (PSBs) to provide credit facilities for emergency purposes to businesses and salaried individuals.

The State Bank of India has offered an emergency credit line where existing borrowers can get loans up to 10% of their existing fund based limits. The maximum amount of the loan is Rs 100 crore. The loans are offered for 6 months and at a low-interest rate of 7.25%.

Similarly, other banks such as Union Bank of India, Indian Bank, and Uco Bank have also extended credit lines for MSME borrowers. The banks are offering loans to all customers, including salaried individuals, self-employed, pensioners, MSME and large corporate houses. 

Also Read: DST Calls for Proposals to Protect General Public from COVID-19

In the case of the salaried, a loan is available up to 20 times of the last drawn salary with a maximum limit fixed at Rs 2 lakh. Senior citizens can avail pension loans up to 15 times of the monthly pension with a maximum of Rs 2 lakh. The tenure of these loans is five years at the normal lending rates.

Banks are also providing instant loans to salaried and youngsters. Small loans are given, such as salary loans, rental loans, and so on to individuals in need of funds. The instant funds are made immediately available to the borrower, from few hours to within a day of the request. The loan amount is based on a percentage of the borrower’s salary and given for a period ranging from one to twelve months.

Instant loans are also available to borrowers with no credit score or low credit score. Many digital lending platforms such as EarlySalary, MoneyTap, PaySense, LoanTap, Qbera grant instant loans to meet short-term expenses of borrowers.

For any clarifications/feedback on the topic, please contact the writer at sweta.dugar@cleartax.in

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