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SBI KAVACH Personal Loan | Bank offers Rs 5 lacs unsecured loan for covid-19 treatment


On 5th May 2021, the RBI Governor Mr. Shaktikant Das announced on  pool of Fifty Thousand crores rupees for the relief of those affected by covid-19. The second wave of the Covid-19 pandemic has caused disruption to people and has put them in a financial crisis.

State Bank of India chairman Mr. Dinesh Khara and Indian Banks' Association chairman Mr. Rajkiran Rai conducted press conference on 30th May 2021 and announced 3 new loan schemes.


SBI chairman announced to offer unsecured personal loans of up to Rs. 5.00 lakhs to public for covid-19 treatment

SBI has announced its SBI Kavach Personal Loan Scheme. Individuals customers of the bank who are Salaried, non-salaried, or pensioners can apply for this loan. The application can be made by visiting to the branch or you an also apply through SBI's YONO app. The apply now link will be available on YONO app to the customers for whom the loan is pre-approved. 

The loan will be available with term loan facility only and no overdraft facility is available. The bank will sanction the loan  after CIBIL check and your loan repayment capacity. The loan amount ranges from Rs. 25,000/- to Rs. 5,00,000/-. 

The maximum loan tenure is 60 months under which a moratorium period of 3 months can be availed and loan to be repaid in 57 EMIs including interest charged during the moratorium. A moratorium period is a period when you need not pay your EMI however the interest is accrued over the period and adjusted with the EMI's to be repaid. 

SBI will charge an 8.5% per annum rate of interest towards this loan. However, each PSB will decide its rate of interest. This rate of interest is lower to rates offered normally on personal loans or unsecured loans.

The repayment will be made by way of Standing Instruction on your salary or pension account or your current account. Standing Instruction means your EMI will be deducted from your account on a set date and no specific transaction is needed to raise to repay your EMI.

The processing fees, pre-payment penalty and foreclosure charges are nil, hence you should try to close as it as early as possible to save interest on the loan.

COVID-19 positive report on or after 01.04.2021 is required to avail this loan

Oxygen Plants:

The setting up of oxygen plants will also be financed by Banks. The finance ministry has announced that under the Emergency Credit Line Guarantee Scheme ECLGS4.0, loans of up to Rs. 2.00 crores will be offered. The interest rate for this loan is capped at 7.5% 
This loan shall be provided to healthcare units,  hospitals, nursing homes, clinics, medical colleges for setting up an on-site oxygen generation plant    

Loans for business:

PSBs will also offer loans for healthcare facilities or expanding healthcare infrastructure for up to Rs. 100 crores. The maximum tenure for these loans will be 120 months.

All the above-mentioned loans will be considered under the covid-19 loan book and under priority sector lending.

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