Central Bank of India Launches Emergency Credit Line for MSMEs
Image for representation. (Twitter/@msnhindi)
State-run Central Bank of India (CBI) on Friday said it has introduced a guaranteed emergency credit line for MSMEs and small business borrowers who are struggling to restart their businesses in the wake of the COVID-19 outbreak.
These customers can avail an additional working capital term loan (WCTL) of up to 20 per cent of their combined fund based outstanding as on February 29, 2020 with a maximum limit of Rs 5 crore, the bank said in a release.
The interest rate is linked to an external benchmark, which is the repo rate, with a cap of 7.50 per cent per annum. It has also fully waived the processing charges for these loans.
"No penal interest is to be recovered and no guarantee fee is to be charged from the customer to cover the loan under Emergency Credit Line Guarantee Scheme (ECLGS) for providing 100 per cent guarantee coverage for such additional working capital term loans," the bank said.
The government had announced the ECLGS last month as part of its stimulus package for the coronavirus-hit economy.
The lender further said it has reduced the interest rate for external benchmark linked accounts by 0.40 per cent after a similar cut in repo rate by the RBI last month.
It is offering new home loans at an interest rate of 6.85 per cent per annum.