Money & Banking

BoB plans to sanction Rs 10,000 crore emergency working capital facility for Covid-19 affected businesses

Our Bureau Mumbai | Updated on May 23, 2020 Published on May 23, 2020

Bank of Baroda   -  BusinessLine

Bank of Baroda (BoB) will sanction Rs 10,000 crore as emergency working capital facility to COVID-19 affected businesses, including micro, small and medium enterprises (MSMEs), according to Sanjiv Chadha, MD & CEO.

The BoB chief emphasised that extending emergency working capital is the right thing to do by the Bank’s clients so that they can survive the impact of the pandemic and gradually return to normalcy.

Among the measures announced on May 13 by the Government under the “Atmanirbhar Bharat Abhiyaan” package, Banks will be providing additional working capital finance of 20 per cent of their outstanding (MSME) credit as on 29 February 2020. These loans will be 100 per cent guaranteed by the Government.

MSMEs, with up to Rs 25 crore (loan) outstanding and turnover of up to Rs 100 crore (whose accounts are standard), will get guaranteed emergency credit at interest rates of up to 9.25 per cent from banks.

Despite the last two months being tough, Chadha said credit sanctions from March 1 till date were 50 per cent higher vis-a-vis the corresponding period last year. However, disbursements are taking time as customers are unable to visit the branches to complete the documentation.

The public sector bank has availed Rs 6,600 crore from the Reserve Bank of India under the targeted long-term repo operations (collectively under first and second versions) to support non-banking finance companies (NBFCs) by purchasing their investment grade corporate bonds, commercial paper, and non-convertible debentures.

BoB has also availed about Rs 1,000 crore under the RBI’s standing liquidity facility to support mutual funds.

Published on May 23, 2020

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