MUMBAI: As part of a series of measures to combat the economic fallout of the coronavirus pandemic, the State Bank of India has opened a Covid-19 Emergency Credit Line (CECL) for needy companies.
Analysts expect more public and private sector banks to introduce similar measures next week.
The Union Cabinet, which met on Saturday, also cleared packages worth nearly Rs 55,000 crore to be spent over five to eight years in incentivizing electronics production, production of bulk drugs, active pharma ingredients andmedical devices setting up bulk drug and medical devices parks .
The schemes, which have been in the works for some time, seem to have been rushed through the cabinet now as supplies of these products from China have stopped in the aftermath of the coronavirus pandemic.
More than opening up the credit taps, companies expect the SBI’s emergency credit line to lead to relaxation in NPA recognition norms that will allow them to remain as standard account in the event of delay in repayments.
Currently, borrowers become defaulters after 90 days of missing payment of interest and principal.
As it is, some sectors, including poultry and aviation, the first to get hit, are seeking extenstion of the NPA recognition norms to 180 days.