Due to COVID-19, SBI opens an emergency credit line for users

COVID-19 is the biggest news in the world today. People are getting affected and government is taking strict measures like work from home to keep it controlled. Many businesses are getting affected because of this major issue and due to this, the State bank of India has finally opened an emergency credit line to their borrowers in order to meet any liquidity mismatch.

This facility is called as COVID-19 emergency credit line, also known as CECL and it will provide the funds of total INR 200 crore to the borrowers and will be available till 30th June,2020. However, this loan will be offered at a good interest rate of 7.25% which will be as long as 12 months.

“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.

The bank added that it is open for the standard accounts which are not classified as SMA 1 or 2 by 16th March,2020. Those people are eligible to avail this credit line.

To find those people who can become an NPA, the special mention accounts got introduced.

Talking about it, SMA-1 accounts are for the people where the overdue period will be between 30-60 days whereas, if we talk about SMA-2, the overdue period will be between 60-90 days.

People can avail 10 percent of the existing funds that will be based on the working capital limits.

It is a good initiative for the people who are looking to borrow money. Let us see how long will it go and when can the situation become back to normal.