Coronavirus Lockdown: Modi government cares! Good news for corporate sector

Amid the complete lockdown in India in view of coronavirus pandemic, Modi government has decided to extend support for the corporate sector. The step has been taken to prevent any liquidity problems for the affected businesses. Centre has asked banks to be ready to extend emergency credit lines on easier terms to corporate borrowers so that business activity didn't suffer on account liquidity squeeze. It has discussed the issue with the Reserve Bank of India (RBI).
 
SBI
 
The State Bank Of India (SBI) has already come out with an ad hoc loan facility 'Covid-19 Emergency Credit Line (CECL)', which is aimed at meeting the temporary liquidity mismatch caused by Covid-19 effects.
 
PSBs: Union Bank, Indian Bank and Bank of India
 
Three other public sector banks -- Union Bank, Indian Bank and Bank of India -- have also come out with emergency credit lines to largely support fund needs of SMEs.
 
SMEs affected
 
"More banks will come with such schemes given that small and medium businesses are taking the brunt of lockdowns most and facing a situation where they may have to go for massive cost cutting as well as layoffs," said a government source as per a report by news agency IANS.
 
Details of emergency credit line
 
The SBI emergency credit line will remain operational till June 30. A borrower can get maximum loan of Rs 200 crore or 10 per cent of the existing fund-based working capital limits, by paying fixed 7.25 per cent interest.
 
The credit line will remain open for a year and repayment starts only after six months in six instalments. The emergency loan facility is aimed at helping MSME borrowers.
 
The schemes of other three banks are also similar.
 
Prime Minister Narendra Modi had announced a complete lockdown across the country for 21 days from Tuesday midnight, asserting that social distancing is the only way out for the country in its decisive battle against the coronavirus.