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Banking industry

Public Sector Banks Announce Covid-19 Relief Measures

Strategic Insights

— 1 min read

As the country continues to battle the pandemic, the Indian Banks' Association (IBA) and State Bank of India (SBI) have joined forces to provide crucial financial aid to individuals and healthcare units. The newly announced loan products and schemes aim to ease access to Emergency Health Services, as encouraged by the RBI. These initiatives will provide much-needed relief to those affected by the pandemic, including individuals undergoing Covid-19 treatments for family members and healthcare units looking to expand their infrastructure.

Key Takeaways:

  • Public sector banks will offer unsecured personal loans up to Rs 5 lakh for Covid-19 treatment, with a 5-year repayment period and an annual interest rate of 8.5% (SBI), with other banks free to decide their interest rates.
  • The loans will be available to salaried, non-salaried, and pensioners, with personal loans ranging from Rs 25,000 to Rs 5 lakh.
  • The RBI has encouraged lenders to provide such loans by offering to refinance up to Rs 50,000 crore with priority sector status for such advances (TOI).
  • PSBs will also provide healthcare business loans of up to Rs 2 crore for setting up oxygen plants and power back-up systems, capped at 7.50% interest for a maximum period of five years, as part of the ECLGS 4.0 scheme.
  • Business loans will be offered to healthcare units, including hospitals, nursing homes, clinics, diagnostic centers, and pathology labs, for setting up or expanding healthcare infrastructure and manufacturing healthcare products like ventilators and vaccines.
  • Loan amounts will vary by location, with metro cities offered up to Rs 100 crore, Tier-1 and urban cities up to Rs 20 crore, and Tier II to Tier IV cities up to Rs 10 crore.

Statistics:

  • Rs 5 Lakh: The maximum loan amount available for unsecured personal loans for Covid-19 treatment.
  • Rs 50,000 Crore: The RBI's offer to refinance lenders with priority sector status for such advances.
  • 8.5%: SBI's annual interest rate for unsecured personal loans for Covid-19 treatment.
  • 7.50%: The interest rate for healthcare business loans up to Rs 2 crore for setting up oxygen plants and power back-up systems.
  • 5 Years: The repayment period for unsecured personal loans and healthcare business loans.
  • Rs 25,000: The minimum loan amount available for personal loans for Covid-19 treatment.

Sources:

  • Indian Banks' Association (IBA)
  • State Bank of India (SBI)
  • The Times of India (TOI)
  • The Hindu

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