Govt Banks Will Give Instant, Unsecured Loans For Covid-19 Treatment; SBI Interest 8%?

In order to provide financial aid and relief to individuals undergoing Covid-19 treatments for their family members, the public sector banks (PSBs) will provide ‘off-the-shelf’ unsecured personal loans of upto Rs 5 lakh for Covid treatment.

In addition to this, business loans will also be extended to healthcare units, in order to provide a push to improving the existing healthcare infrastructure.

These are among the three new loan products announced by the Indian Banks’ Association (IBA) on Sunday.

These products are released with a view to create a Covid loan book, as announced by RBI on May 5, which states that it will provide a term liquidity facility of ?50,000 crore to banks to ease access to Emergency Health Services.

Personal Loans Upto Rs 5 Lakh for Covid Treatment
In a joint press conference of the Indian Banks’ Association (IBA) and State Bank of India (SBI) on Sunday, three new loan products or schemes aimed particularly towards Covid-19 relief, were introduced.

The Chairman of SBI, Dinesh Khara announced in this conference that public sector banks in the country will offer unsecured loans upto Rs 5 lakh, to individuals undergoing Covid treatment.

An unsecured loan is a loan that doesn’t require any type of collateral, instead is approved on a borrower’s creditworthiness.

These individuals include salaried, non-salaried and pensioners, and personal loans ranging from Rs 25,000 to Rs 5 lakh will be offered to these individuals, as an aid to self and family members’ COVID-19 treatment.

The payback for this personal loan is 5 years and SBI will charge an annual interest rate of 8.5%. Other banks are free to decide their interest rates.

The RBI had encouraged lenders to provide such loans earlier this month by offering to refinance up to Rs 50,000 crore with priority sector status for such advances, mentioned TOI.

Healthcare Business Loans of Upto Rs 2 Crore; ECLGS 4.0
Besides offering personal unsecured loans to individuals, PSBs will also provide healthcare business loans of upto Rs 2 crore, to hospitals and nursing homes for setting up oxygen plants and corresponding power back-up systems, capped at 7.50% interest for a maximum period of five years.

This loan will be a part of the Government’s Emergency Credit Line Guarantee Scheme (ECLGS ) 4.0 scheme.

Business Loans for Healthcare Facilities
The PSBs will also provide business loans to set up/expand the healthcare infrastructure in the country.

The target group for such loans will be the ecosystem engaged in building/servicing healthcare infrastructure; hospitals, nursing homes, clinics, diagnostic centres and pathology labs, states the Hindu.

The loans will be offered to businesses/firms looking forward to setup/expand healthcare infrastructure and to manufacture healthcare products like ventilators and vaccines.

While metro cities will be offered loan amounts upto Rs 100 crore, Tier-1 and urban cities will be offered up to Rs 20 crore and Rs 10 crore to Tier II to Tier IV cities.