Amid COVID-19 outbreak, banks come fwd to rescue MSMEs; UBI sets up emergency funding window
New Delhi, Mar 25 (KNN) Keeping note that Coronavirus pandemic which has spread across countries paralyzing economies and has brought normal operations to a halt especially for Micro Small and Medium Enterprises (MSMEs), several banks have come to rescue them.
Public sector lender Union Bank of India (UBI) has set up an emergency funding window for its MSME and corporate customers impacted by COVID-19 outbreak.
As per the statement, the bank is offering a maximum 10 per cent of the existing working capital limit to accounts that are standard as on February 1, 2020 adding that ''the repayment period of these loans will be 36 months, including maximum moratorium of 12 months. The window is open till September 30, 2020.''
“This credit facility is available at NIL margin with competitive rate of interest – 8 per cent fixed rate of interest, which is one-year MCLR as on date,” the bank said.
On the other hand, State-run Bank of Baroda too has set up an emergency credit line to provide funds to its existing MSME and corporate borrowers impacted by the outbreak of coronavirus.
“The Bank has decided to make maximum 10 percent of the existing fund based working capital limits (FBWC) subject to maximum of Rs 200 crore. This is in addition to existing adhoc/excess/standby letter of credit (SLC)/gold card limit,” BoB said in a statement on Wednesday.
The bank said that MSME borrowers would be given loan at an interest rate of the bank's repo linked lending rate of 8 percent.
Public sector banks, including State Bank of India, and Indian Bank, have already rolled out similar lines of credit for their customers to meet any liquidity mismatches.