NEW Loan Products: LAUNCHED! SBI, IBA announce support measures by all Public Sector Banks to mitigate impact of Covid 19

In a major development, Dinesh Khara, Chairman, SBI, Rajkiran Rai, Chairman, IBA and Sunil Mehta, Chief Executive, IBA addressed a joint press conference on Sunday to announce the various support measures and launch of new loan products by all Public Sector Banks to mitigate the impact due to resurgence of Covid pandemic. Here are all the details:-

"While the economy had revived well from the beginning of 4th quarter of FY21, its resurgence since April 21 has impacted the lives of individuals, and cash flows of businesses and MSMEs.

To address the disruptions caused by the resurgence of Covid pandemic, Reserve Bank of India (RBI) in the statement dated 05.05.2021 has announced several measures such as
• Term Liquidity Facility of ₹50,000 crore to Ease Access to Emergency Health Services (Covid Loan Book),
• Resolution Framework 2.0 for COVID Related Stressed Assets of Individuals, Small Businesses and MSMEs ,
• Re-assessment of Working Capital Limits etc.," an official statement said.

"Further, Government of India with a view to providing support to MSMEs, safeguard livelihoods and to help in seamless resumption of business activity and also to give fillip to finance the critical healthcare facilities, has announced modifications to the very successful ECLGS Scheme," the statement added.

"Government has enlarged the scope of ECLGS. DFS, GOI has announced today the contours of an expanded ECLGS 4.0 with 100% guarantee cover by NCGTC for loans up to Rs.2 Cr. to hospitals, nursing homes, clinics for setting up on site Oxygen Generation plants."

Validity of ECLGS has been extended to 30.09.2021. Disbursement under the scheme is permitted up to 31.12.2021.

Operating Guidelines will be issued by NCGTC.

In the backdrop of the above, Public Sector Banks have undertaken.
(i) To implement the expanded ECLGS measures  
(ii) To make the loan products available to business entities to  improve the healthcare infrastructure and to individuals to meet the expenditure for covid treatment
(iii) To put in place systems and processes for seamless implementation of RBI’s Resolution Framework 2.0

Banks are expected to create a Covid loan book under the RBI Guidelines.

Accordingly, 3 undernoted products have been designed to provide fresh lending support to vaccine manufacturers, hospitals/dispensaries, pathology labs, manufacturers and suppliers of Oxygen, Ventilators, importers of vaccines & Covid related drugs logistics firms and patients for treatment.

1.  Healthcare Business Loans for setting up Oxygen Plants under ECGLS. Loan upto Rs.2 Crores capped @ 7.5% for hospitals, nursing homes for setting up Oxygen plant, backed by 100% guarantee cover of NCGTC under ECLGS 4.0.

2. Business loans for Healthcare Facilities upto Rs.100 Crores To setup / expand healthcare infrastructure and to manufacturers of healthcare products

3. Unsecured personal Loans to   Individuals from Rs.25000 to Rs.5 lakhs for Salaried, non-salaried and pensioners for meeting Covid treatment.

All the above schemes are being offered by PSBs at concessional interest rates and will form part of the Covid loan book.

In regard to Resolution Framework 2.0, PSBs have formulated Templated Approach for restructuring of Loans.

Business Loans-Three categories:

1. Upto Rs 10 lakhs : Standardised Restructuring Offer to Certain Small Businesses and MSMEs
2. Above Rs 10 lakhs and upto Rs 10 Crores
3. Above Rs 10 Crores

Loans to Individuals

To have seamless implementation in effective manner, PSBs have come out with strategic approach

• Standard templates, portal and branch based approach.
• Graded approach for restructuring
• Standard application and assessment formats
• Standard and simplified documentation
• Common outreach approach

"The above initiatives taken by all the PSBs by coming together and announced today is a significant step in the right direction to mitigate the financial impact due to Covid resurgence on all affected segments of the borrowers," the statement further adds.

The Chairman of SBI, Chairman IBA  and CEO, IBA also explained the various outreach  initiatives being taken by them to reach out to all the eligible customers for restructuring of loans availed by individuals, Businesses and MSMEs under Resolution Framework 2.0 of RBI.