Following the day long ‘Janta Curfew’ on March 22 to ensure that people maintain social distancing, many states have announced lock down till March 31, 2020, which would put a pause on almost all economic activities. With the Indian Railways announcing cancellation of all passenger trains till March 31, 2020 and metro rails in many metro cities also to stop for the period, there would be total travel ban to complicate the economic problems.
To help out its borrowers facing hardship due to the spread of Novel Coronavirus COVID-19, India’s largest public sector lender State Bank of India (SBI) has announced to make available additional credit facilities to the eligible existing borrowers by way of ad-hoc facilities i.e. COVID-19 Emergency Credit Line (CECL) to tide over the current crisis situation.
So, the existing SBI borrowers, facing difficulties due to stalled economic activities due to Coronavirus scare, may opt for the CECL by way of SLC (Standby Letter of Credit) till June 30, 2020.
Holders of all standard accounts, which have not been classified as Special Mention Account (SMA) 1 or 2, are eligible to get the additional loan up to 10 per cent of the existing Fund Based Working Capital Limits (FBWC) with a maximum credit limit of Rs 200 crore.
The loan amount would be disbursed in one go and may be repaid in six equated monthly instalments (EMIs) after a moratorium period of six months from the date of disbursement of the loan, with the option of extending the cover period of receivables by three months till closure of the facility.
The interest will be charged at a fixed rate of 7.25 per cent per annum and to be served as and when applied.
So, the existing SBI borrowers, facing difficulties due to economic problems aggrieved by the shut downs aimed to contain the spread of Coronavirus, there is a golden opportunity to grab the low interest credit line to cross over the turbulent time.