Banks Decide To Extend Unsecured Personal Loans For Covid Treatment

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Public sector banks (BSPs) have decided to make unsecured personal loans available to individuals to meet Covid treatment expenses. In addition, they will also provide loans to improve health care infrastructure.

This with the aim of creating a Covid loan portfolio in line with the Reserve Bank of India’s May 5 announcement that it will provide a term liquidity facility of 50,000 crore to banks to facilitate access to health services. emergency.

Individuals (employees, non-employees as well as retirees) will be offered unsecured personal loans for the Covid treatment of themselves and members of their family.

The minimum and maximum loan amount, which will be at a concessional rate and for a maximum period of five years, will be 25,000 and 5 lakh respectively.

State Bank of India chairman Dinesh Khara said his bank will charge 8.50% interest on these loans.

A pandemic cuts 75% of the income of the ultra-poor

ECGLS 4.0

Banks will provide loans to healthcare companies to hospitals and nursing homes to install oxygen factories as well as power supply of up to 2 crore per entity at an interest rate of 7.50% for a maximum period of five years.

The loans will be part of the Government’s 4.0 Emergency Credit Line Guarantee System (ECLGS) program.

Commercial loans for healthcare facilities

Banks will provide business loans for health facilities. The target group of these loans will be the ecosystem engaged in the construction / maintenance of health infrastructure; hospitals, nursing homes, clinics, diagnostic centers and pathology laboratories.

The business loans, which will be at preferential rates and for a maximum duration of 10 years, are intended for the establishment / extension of health infrastructures and the manufacture of health products.

The amount of loans to be offered will be up to 100 crore in metro centers; up to ₹ 20 crore in level I and urban centers; and up to ₹ 10 crore at level II to VI centers.

Rajkiran Rai G, president of the Association of Indian Banks, pointed out that the Covid loan portfolio will be given priority sector classification.

To encourage banks to provide new loan support to a wide range of entities under emergency health services, RBI said they would be eligible to park their excess liquidity up to the size of the portfolio. Covid loans with it under the reverse repurchase window at a rate that is 40 basis points higher than the reverse repo rate.


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