Coronavirus Outbreak: Bank of Baroda sets up emergency credit line to provide funds for MSMEs, corporate borrowers

Bank of Baroda's announcement follows a similar additional funding facility announced by the country's largest lender State Bank of India for its borrowers last week.

Press Trust of India March 26, 2020 07:51:39 IST
Coronavirus Outbreak: Bank of Baroda sets up emergency credit line to provide funds for MSMEs, corporate borrowers

Mumbai: State-run Bank of Baroda on Wednesday said it has set up an emergency credit line to provide funds to its existing MSME and corporate borrowers impacted by the outbreak of coronavirus .

This follows a similar additional funding facility announced by the country's largest lender State Bank of India for its borrowers, last week.

“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 late night statement.

MSME borrowers would be given loan at an interest rate of the bank's repo linked lending rate of 8 percent.

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Representative image. Reuters

Loans to corporate borrowers will be offered at one-year MCLR of 8.15 percent without the standard premium.

“We hope the additional liquidity facility Baroda COVID-19 Emergency Credit Line (CECL) will offer the requisite support to our customers to smoothly tide over the financial distress,” the bank's executive director Vikramaditya Singh Khichi said.

The loan will be offered for a maximum period of 24 months.

The bank said 15 percent of the loan amount is repayable on monthly /quarterly instalment basis in first six months and balance 85 percent will be repayable in next 12 months.

All standard accounts that have not been classified as SMA 1 or SMA 2 as on 26 March, 2020 and till the date of sanction are eligible for loan under this scheme.

Eighty percent of proposed limits should be backed by the value of the stocks and receivables and 20 percent can be given on clean basis, the bank said.

Earlier in the day, another state-run lender Indian Bank said it will provided an additional funding facility to its large, MSME, retail pensioners and self-help groups (SHGs) customers.

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