SBI opens emergency credit line for borrowers as businesses grapple with coronavirus

India's largest lender SBI has decided to make available additional liquidity credit facilities to help borrowers tide over the current crisis fuelled by the coronavirus pandemic.

As businesses get affected due to the novel coronavirus pandemic, the State Bank of India, the country's largest lender, 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 Rs 200 crore and will be available till June 30, 2020, SBI said.

The loan will be offered at an interest rate of 7.25 percent with a tenure of 12 months.

With a view to provide some degree of relief to borrowers whose operations are impacted by COVID-19, it has decided to make available additional liquidity credit facilities to 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 was 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.

Borrowers can maximum avail 10 percent of the existing fund based working capital limits, subject to a cap of Rs 200 crore, the bank said.

According to a recent survey by industry body FICCI, over 50 percent of companies in the country have seen the impact of coronavirus on their operations. Nearly 80 percent businesses have witnessed a decline in cash flows due to the global pandemic, it showed.

The pandemic has presented fresh challenges to the country's economy, causing severe disruptive impact on both demand and supply side elements, which has the potential to derail the growth story, a FICCI poll said.

(Disclaimer: Additional background information has been added to this PTI copy for context)

(Edited by Teja Lele Desai)


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