Amid businesses getting affected due to the novel coronavirus pandemic , the country’s largest lender State Bank of India has opened an emergency credit line to meet any liquidity mismatch for its borrowers.
The additional liquidity facility — Covid-19 Emergency Credit Line (CECL), will provide funds up to ₹200 crore and will be available till June 30, 2020, SBI said in a circular issued on Friday.
The loan will be offered at an interest rate of 7.25% with a tenure of 12 months.
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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.
The bank said the credit line is open for all standard accounts which have not been classified as SMA 1 or 2 as on March 16, 2020.
Special Mention Accounts (SMA) was introduced to identify those accounts that has 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.
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According to a recent survey conducted by industry body, Federation of Indian Chambers of Commerce and Industry (FICCI), over 50% of companies in the country see impact of coronavirus on their operations.
Nearly 80% businesses have witnessed decline in cash flows due to the global pandemic, it showed.
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