The PSU banks have jointly announced priority lending scheme involving COVID treatment personal loan up to Rs 5 Lakh & multiple health care business loans across India.
In the wake of ongoing second wave of pandemic, Indian Banks’ Association (IBA) and State Bank of India (SBI) on Sunday announced three special loan schemes for financing cost of Covid treatment and supporting medical infrastructure. In the joint press conference, IBA & SBI shared special Personal Loan up to Rs 5 Lakh for COVID 19 treatment and Health Care Business Loan up to 2 Crore for businesses, and widened the scope of ECGLS scheme.
The SBI has announced special Personal Loan Scheme in the range of Rs 25,000 to Rs 5 lakh for treatment expense of COVID-19. The personal loan for COVID treatment will be available to salaried, non-salaried and pensioners for up to 5 years. The COVID Personal Loan Scheme will be available at 8.5% p.a.
Besides offering relief to individuals suffering from COVID-19, this lending package also offers easy lending scheme for businesses dealing in COVID related medical supplies & equipment including such as vaccine manufacturers, hospitals/dispensaries, pathology labs, manufacturers and suppliers of oxygen, ventilators, importers of vaccines & COVID related drugs logistics firms.
Furthermore, Healthcare Business Loan up to Rs 2 crore for 5 years will be available for existing hospitals and nursing homes to facilitate financing of cost of setting up oxygen plants and power back up system. This funding will be part of government’ ECGLS Scheme.
What is ECLGS?
The Indian government recently announced Rs 3-trillion ECLGS i.e. Emergency Credit Line Guarantee Scheme for businesses hit by Covid-19 second wave. The rate of interest is capped nominally at 7.5% p.a and these ECLGS loans are backed by NCGTC’s 100% guarantee cover.
Additionally the IBA & SBI bank have also announced Special Business Loans for healthcare facilities. Here, loans up to Rs 100 crore can be availed for setting up or expanding healthcare infrastructure aiding vaccine and ventilators in metro cities. Also, firms in Tier 1 and urban centres can apply for business loans up to Rs 20 crore and firms in Tier II to Tier IV cities can apply for loans up to Rs 10 crore. The tenure will be 10 years.
All these schemes will be marked under COVID loan book of the banks and will be treated as priority sector lending. SBI Chairman Dinesh Khara said the schemes are purported “to mitigate potential hardship that the MSMEs could face during the second wave.”
Earlier this month, RBI had announced term liquidity facility of Rs 50,000 crore for healthcare infrastructure, Resolution Framework 2.0 for individuals, small businesses and MSMEs, and re-assessment facility for working capital limits. The government further widened the scope of ECLGS and extended the scheme till September 30, 2021. The disbursement is permitted up to December 31, 2021.
Further the IBA and SBI informed that there is enough headroom under previous COVID related schemes such as collateral free automatic loans worth for MSMEs. They added that Aviation companies can avail of business loans of up to Rs 200 crore to deal with the COVID induced financial crisis.
The ease of credit availability will certainly help individuals and businesses to efficiently deal with financial crisis imposed by the pandemic.
Reshma Rawat is a passionate writer with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra and writes blogs & webpages on financial products (loans, credit cards, insurance, government financial policies, mutual funds, etc.).
Director- MyMoneyMantra FinTech| A senior retail and commercial banking professional, adept at handling Business Development, Sales Planning & Growth, Product Strategy, Marketing Operations and Client advisory services phygitally.
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