Indian Overseas Bank launches new loan scheme - Check eligibility, know how to apply

To help people tide over the challenges inflicted by COVID-19 lockdown, Indian Overseas Bank has launched a special scheme. Indian Overseas Bank (IOB) on Monday said it has introduced a special borrowing programme for self help groups (SHG). The maximum loan amount is Rs 5,000 per member of a self help group (SHG) with a cap of Rs 1 lakh for the group.

Are you eligible?

-The bank said SHGs with a good track record and a history of minimum two loans from IOB will be eligible for this loan facility, which can be availed till June 30, 2020.?

-As per the bank's rule, only those SHGs whose existing loans are standard and performing as on March 1, 2020 are eligible to avail loan under this special scheme.

How to apply?

- The state-owned lender said interested borrowers can apply through branches directly or through business correspondents.

-IOB said the loans would be sanctioned and disbursed within six working days.

Repayment of loans? Charges? Fee? Interest rates?

-The loans are to be repaid in 30 EMIs after initial moratorium of six months, it said, adding the rate of interest for these loans is 9.4 per cent.

-The bank said it will not charge any processing fee or pre-payment fee for this loan scheme.

"SHG borrowers are an important part of the economy...We are working to the best of our ability to extend our support to SHGs and help them in the wake of Coronavirus. Our efforts are aligned with the Government of India's advice to help all sectors in the economy to function properly and sustain amidst the crisis at hand. These loans will assist the SHGs pass through the difficult times they are encountering in the present scenario," IOB MD & CEO Karnam Sekar said.

Also these loans will have no correlation with the corpus of the SHG. Moreover, to encourage this segment of borrowers no additional security will be required from the group.