Banks grant emergency loans to workers and entrepreneurs after interest rates cut

0


With the Reserve Bank of India sharply cutting benchmark rates and also allowing banks to defer EMIs, banks are slowing their readiness to lend to various sectors, including wage earners and entrepreneurs. And with the loss / fall of income, and even the jobs threatened, many would be looking for such loans to get through these difficult times. Adhil Shetty, CEO of Bankbazaar.com, said: “With job losses linked to the pandemic and the possibility of a looming recession, banks fear that the default rate on unsecured loans could rise. arrow. Despite this, many have indicated their willingness to help with special emergency loans. “

For Employees: Padmaja Chunduru, Managing Director, Indian Bank, says: “We have launched products in all categories, not only for businesses or MSMEs, but even emergency salary loans, loans for retirees and self-help groups. The bank’s retail payroll loan is called the IND-COV emergency payroll loan. Under this scheme, you can get a loan of an amount equivalent to 20 times your last gross monthly salary up to Rs 2 lakh. To be eligible for the loan, you must have a salary account with the bank. In case you are a bank mortgage borrower, you can avail this loan even if you don’t have a payday account.

Chunduru adds, “Even if you don’t have an existing banking relationship, you can qualify for the Emergency Payroll Loan, if you have a guarantor for the same.” A sponsor can be your spouse or an employee from your existing organization. There is no processing fee. Interest charged is 9.50 percent for 36 months, including a six-month vacation period. Even Bank of India grants loans to individuals, but in the form of a personal loan. Eligibility: Three times the last salary drawn up to Rs 5 lakh.

Small traders, businesses, self-employed, professionals: Large businesses need loans like millions of households, and the economy depends on it. But to alleviate the difficulties of micro, small and medium enterprises (MSMEs), most public sector banks offer a Covid-19 Emergency Line of Credit (CECL).

CM Minocha, Head of Credit Policy and MSMEs, Union Bank of India, said: “We are offering a CECL program for MSMEs and businesses with a maximum amount of Rs 50 crore. For small businessmen, traders, self-employed, professionals (MSE borrowers), with exposure up to Rs 5 crore in working capital limit and term loan, we have a separate program.

The loan can be used to meet working capital needs, pay salaries and other expenses. “Since even a photocopy is not available, we will give borrowers enough time to complete the documentation,” he added.

The Bank of Baroda Emergency Line of Credit is as a short term loan / demand loan to existing MSMEs is 8 percent and a maximum of Rs 200 crore. State Bank of India will provide up to Rs 200 crore for 12 months at 7.25%. Keep in mind that most banks provide additional financing of 10 percent of existing working capital limits or term loans.

For Retirees: This is available for existing Indian Bank customers. They can get a loan of 15 times their monthly pension, and a maximum of Rs 2 lakh to meet unforeseen expenses.

This loan has zero processing fees at 8.75 percent interest.

However, most banks only offer them to their existing customers. As Shetty says, “Lenders are reluctant to extend credit to new customers because of the difficulty associated with obtaining paper documents and verifying new customers.

Of course, in the absence of these options, you can consider a short-term personal loan from your bank or a payday advance loan from a non-bank financial institution.

Satyam Kumar, CEO of LoanTap, says: “The early payday loan is a form of short-term credit for salaried professionals. They can receive up to 2.5 times their salary for 3 to 12 months. Another flexible line of credit is an overdraft which gives customers the option of multiple withdrawals and repayments. “

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor


Share.

About Author

Leave A Reply