Public sector banks in the country appear to be supporting the government’s efforts to boost Covid-19 related healthcare infrastructure in the country by actively lending to the healthcare and associated segments that are in need of liquidity.

Last month, the Reserve Bank of India (RBI) announced a term liquidity facility of ₹50,000 crore for Covid-related healthcare infrastructure and services in the country. This was done for fresh lending support to a wide range of entities in the healthcare space.

Fresh lending provided under this facility will be classified as ‘Priority Sector Lending’ till the repayment or maturity of these loans. The RBI has also allowed on-lending to other financial entities that are regulated by the Central bank. Further, banks are eligible to park surplus liquidity equivalent to the loan amount in the reverse repo window at a rate that is 40 bps higher than the prevailing reverse repo rate.

After the RBI announcement, public sector banks are reported to be enthusiastically extending credit to healthcare sector players and entities. A couple of banks have already extended more than ₹500 crore worth of loans each under the Covid loan book.

‘Identifying customers’

Padmaja Chunduru, Managing Director & CEO of Indian Bank, said the bank had already identified many of its own customers to lend. She said the bank had fixed a target of ₹4,000 crore for its Covid loan book, while it had sanctioned more than ₹600 crore till a couple of weeks ago under this portfolio. “There is good traction and a lot of enthusiasm to do this business,” she said.

State Bank of India has indicated that it could create a Covid loan book to the tune of about ₹10,000 crore. The bank is keen on supporting the hospitals and nursing homes in augmentation of their oxygen facilities and other requirements.

LV Prabhakar, Managing Director & CEO, Canara Bank, had indicated that the Bank had done a lot of homework as far as medical services financing is concerned, under this Covid loan book. It had sanctioned more than ₹1,200 crore worth of loans under this medical loan book till a few weeks ago and said it could comfortably sanction and disburse about ₹4,000 crore to ₹4,500 crore.

G Rajkiran Rai, Managing Director & CEO, Union Bank of India, said the bank is very positive about building a good Covid-19 loan book. It has products for this category and the branches are already canvassing and reaching out to potential borrowers.

While the pandemic has created a lot of challenges across sectors, it has also thrown up some new opportunities. Banking sector is also expected to be one of the beneficiaries.

With a greater focus by Central and State governments, the healthcare segment offers potential opportunities for the banks to build a good portfolio over the short and medium terms at a time many other segments are grappling with slowdown.

Several private sector lenders, both old and new, are also actively looking at lending opportunities in the healthcare infra space.

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