State Bank of India has decided to open a special credit facility for small business borrowers impacted by the coronavirus outbreak, according to a senior official at India's largest lender.
The facility aims to address any liquidity concerns among micro, small and medium enterprises borrowers who have seen business disruptions owing to the Covid-19 pandemic, the official said on the condition of anonymity.
Before June 30, borrowers can access loans up to Rs 200 crore for 12 months at a flat rate of 7.25 percent, the official said. They won't have to pay any processing fee or a prepayment penalty on loans availed under this facility, the person said.
It's open to borrowers either classified as standard or have been in default for less than 30 days at the time of availing the loan.
SBI is the first lender to allow special loan windows for smaller borrowers as shutdowns and curbs to counter the novel coronavirus disrupt business. The Mint newspaper first reported on Friday that SBI had decided to open ad hoc facilities for smaller business borrowers.
So far, the Reserve Bank of India has announced three measures to counter the liquidity pressure in the local money markets as well as foreign exchange markets. It's conducting a $2 billion six-month sell/buy swap to manage the flow of foreign exchange. The RBI is also conducting Rs 1 lakh crore worth long term repo operations. The regulator has also conducted Rs 10,000 crore worth open market operations and announced additional Rs 30,000 crore worth purchase of government securities.
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