Country’s largest lender State Bank of India (SBI) announced the Covid 19 Emergency Credit Line (CECL) for borrowers. The loan will be offered to business getting affected due to novel coronavirus pandemic. Emergency Credit Line will help the borrowers to meet any liquidity mismatch for businesses.
COVID 19 Emergency Credit Line (CECL)
Standard accounts which have not been classified as SMA 1 or 2 as on March 16, 2020.
This additional liquidity facility extended by SBI will offer loan up to 200 crore and will be available till 30 June according to a circular issued by the bank.
The loan under COVID 19 Emergency Credit Line (CECL) will be offered at an interest rate of 7.25 percent.
The main purpose for offering additional credit facility is to provide some sort of relief to the borrowers whose business operations are hit by Covid 19. This emergency credit line will help the businesses to tide over the current crisis situation.
Special Mention Accounts (SMA)
Special Mention Accounts (SMA) are those accounts that show symptoms or potential to become an NPA/ stressed asset in first 90 days itself or before it being identified as NPA. Further, they are classified as – SMA0, SMA1, SMA2
SMA1 accounts are those accounts where overdue period is 31 to 60 days.
In case of SMA2 accounts overdue period is 61 to 90 days.
All standard accounts as on March 16, 2020 and till the date of sanction are eligible. However, standard accounts classified as Special Mention Accounts – SMA 1 (overdue between 30-60 days) and SMA2 (overdue between 61-90 days) are not eligible for availing credit facility.
The maximum loan that that could be availed under special scheme is capped at Rs 200 crore. SBI said this loan facility shall be made available as Fund Based Limits only.
India’s largest lender SBI said the loans will be repayable in six equated monthly instalments after a moratorium period of six months from the date of loan disbursement.