The Indian Banks' Association (IBA) has announced that effective Monday banks will undertake only essential services like cash deposit and withdrawal, cheque clearances, remittances and government transactions.
The Indian Banks’ Association (IBA) has announced that effective Monday banks will undertake only essential services like cash deposit and withdrawal, cheque clearances, remittances and government transactions. “Other non-essential services during this period may be suspended,” the IBA said in a statement. “We appeal to everyone, to visit branch premises only in case of absolute necessity,” it said.
The new arrangement is put in place in the wake of Covid-19 outbreak. Reserve Bank of India’s governor Shaktikanta Das had also requested customers to use digital banking to minimise impact of Covid-19. The governor urged public to use digital payment modes such as NEFT, IMPS, UPI, etc, from home and avoid cash transactions for minimising gathering at banks or ATMs.
Taking a cue from it, the IBA had advised customers to use electronic payment options, instead of visiting branches to deposit or transfer money through cash or cheques. In order to minimise face-to-face meeting, the IBA had urged people to use digital platforms instead for lending.
India’s largest lender, State Bank of India (SBI) has set up an emergency credit line for its borrowers in the wake of novel coronavirus as businesses are getting affected. SBI in its departmental circular on Friday stated that the additional liquidity facility Covid-19 emergency credit line will provide funds up to 10% of the existing fund-based working capital limits, up to maximum amount of `200 crore.
The loan will be offered for a period of 12 months. All the standard accounts which have not been classified as special mention accounts (SMA) 1 and 2 as on March 16, 2020, were eligible to avail this loan. FE reported on Friday that IBA had written to the RBI with a proposal to consider deferment of term-loan repayments by six months and not to classify working capital loans as non-performing assets (NPAs) for three more months, even in the case of default.
The final announcement on relaxations sought by bankers on behalf of the IBA will be made by the RBI and the government. Prime Minister Narendra Modi had announced earlier that the government has decided to form a Covid-19 economic response task force to be headed by the finance minister. The first meeting of the task-force was held in New Delhi on Friday.