SBI Chairman Dinesh Khara explains rolling out RBI’s 5-May SME loan relief measures; ECLGS extended

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Updated: May 30, 2021 1:17:13 pm

SBI Press Conference HIGHLIGHTS: The government announced an extension of its Rs 3 lakh crore ECLGS and will also offer 100% guarantee cover to loans up to Rs 2 crore to hospitals or nursing homes etc., for setting up on-site oxygen generation plants.

SBIStrategists expect India’s marquee lenders to withstand the impact of a slowing economy thanks to robust provisioning and new measures that will allow them to hide the true extent of their bad loans through 2022.

SBI Press Conference HIGHLIGHTS: State Bank of India’s (SBI) Chairman Dinesh Khara talked about loans for SMEs, Covid-19 resurgence, and RBI’s relief measures of 5 May 2021 in a press conference on May 30, 2021. Chairman Khara explained how RBI’s SME loan relief measures, which were announced on May 5, 2021, will be rolled out. He informed that PSBs have formulated templated approach for restructuring loans to individuals, small businesses and MSMEs up to Rs 25 crore. In order to approach bank for resolution, customers can file an application on the portal at the bank website, they can make manual submission of applications at the branch. Khara also informed that government will provide 100 per cent guarantee cover to loans up to Rs 2 crore to hospitals/nursing homes etc for setting up on-site oxygen generation plants, interest rate capped at 7.5%. The validity of ECLGS has also been extended to September 30, 2021, or till guarantees for an amount of Rs 3 lakh crore is issued. The disbursement under the scheme has been permitted up to December 31, 2021.

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Highlights

    13:10 (IST)30 May 2021
    Modifications would enhance the utility, impact of ECLGS by providing additional support to MSMEs

    The modifications in ECLGS would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in seamless resumption of business activity. These changes will further facilitate flow of institutional credit at reasonable terms, the Finance Ministry said in a release.

    13:02 (IST)30 May 2021
    Banks will avail funds from RBI under special window depending on liquidity: IBA Chairman

    IBA Chairman Rajkiran Rai said that banks will avail funds from RBI under a special window depending on the liquidity situation

    13:00 (IST)30 May 2021
    Impact of 2nd COVID-19 wave may not be as bad as it was during the 1st wave: Khara

    SBI Chairman Dinesh Khara said that the impact of second COVID-19 wave may not be as bad as it was during the first wave

    12:39 (IST)30 May 2021
    ECLGS 4.0: Govt extends emergency credit scheme for MSMEs; increases ECLGS 1.0 tenor to 5 years

    In order to support Covid-hit MSMEs further, the government on Sunday announced a three-month extension of its Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) to September 30, 2021, from June 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued under the fourth revision of the scheme dubbed ECLGS 4.0. The Ministry of Finance also announced 100 per cent guarantee cover to loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants with interest rate capped at 7.5 per cent.

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    12:36 (IST)30 May 2021
    Validity of ECLGS extended to Sept 30, 2021

    Validity of ECLGS extended to 30.09.2021 or till guarantees for an amount of Rs.3 lakh crore is issued. Disbursement under the scheme permitted up to 31.12.2021.

    12:35 (IST)30 May 2021
    Borrowers who are eligible for restructuring will be able to avail a tenure of 5 years for their ECLGS loan

    Borrowers who are eligible for restructuring as per RBI guidelines of May 05, 2021 and had availed loans under ECLGS 1.0 of overall tenure of four years comprising of  repayment of interest only during the first 12 months with repayment of principal and interest in 36 months thereafter will now be able to avail a tenure of five years for their ECLGS loan i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months

    12:31 (IST)30 May 2021
    Govt to provide 100% guarantee cover to loans up to Rs 2 cr to hospitals/nursing homes

    Government to provide 100 per cent guarantee cover to loans up to Rs 2 crore to hospitals/nursing homes etc for setting up on-site oxygen generation plants, interest rate capped at 7.5%

    12:29 (IST)30 May 2021
    Support to MSMEs

    "The modifications in ECLGS would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in a seamless resumption of business activity. These changes will further facilitate the flow of institutional credit at reasonable terms," the Finance Ministry said in a release. 

    12:27 (IST)30 May 2021
    Civil aviation sector gets access to funds

    The Finance Ministry today announced that the civil aviation sector will be eligible to avail funds under the ECLGS 3.0 scheme. The current ceiling of Rs 500 crore of loan outstanding for eligibility under ECLGS 3.0 will be removed. 

    12:23 (IST)30 May 2021
    ECLGS fund availability

    Of the total kitty available for the ECLGS scheme, over Rs 2.5 lakh crore has been exhausted so far.

    12:21 (IST)30 May 2021
    Templated standarised approach for Business, MSME loans upto Rs 10 lakh

    -Data of eligible units i.e upto Rs 10 lakh as on 31st March 2021 has been extracted-Bulk SMS has been sent to eligible customers including already restructed accounts-Offer cum acceptance letters along with application has been generated centrally-Customer to submit acceptance of offer letter to the Branch through email/post/WhatsApp

    12:17 (IST)30 May 2021
    Guidelines on restructuring, application formats available on banks websites

    Detailed guidelines on restructuring and application formats are available on websites of the banks

    12:15 (IST)30 May 2021
    Business loans have been divided into 3 categories

    Business Loans- 3 categories-a) Upto Rs 10 lakh: Standardised restructuring offer to certain small businesses and MSMEsb) Above Rs 10 lakh and upto Rs 10 croresc)Above 10 crore- Graded approach for restructuring-Standard application, assessment formats- standard and simplified documentation- Common outreach documentation

    12:15 (IST)30 May 2021
    How can customers approach bank for resolution

    • Customers can file an application on the portal at the bank website.
    • Manual submission of application at the branch.
    • Processing of application and implementation in the system.

    12:13 (IST)30 May 2021
    Loan restructuring for individuals

    PSBs have set up a template approach to offer restructuring for individuals and MSMEs up to Rs 25 crore.

    12:11 (IST)30 May 2021
    PSBs formulated templated approach for restructuring loans

    PSBs have formulated templated approach for restructuring loans to individuals, small business and MSMEs up to Rs 25 crore

    12:11 (IST)30 May 2021
    Loan amounts under schemes

    Healthcare business loan for setting up oxygen plan -- Up to Rs 2 crore

    Business loan healthcare facilities -- Metro centres up to Rs 100 croreTier 1 and urban centres up to Rs 20 croreTier 2 to Tier 4 up to Rs 10 crore

    12:10 (IST)30 May 2021
    Banks likely to create COVID loan book under RBI guidelines

    Banks are expected to create COVID loan book under Reserve Bank of India (RBI) guidelines

    12:09 (IST)30 May 2021
    PSB loan products to ease access to healthcare

    Banks are offering healthcare business loan for setting up oxygen plans, Business loan healthcare facilities, and unsecured personal loans for covid treatment. 

    12:09 (IST)30 May 2021
    ECLGS 4.0 interest rate capped at 7.5%

    ECLGS 4.0:100% guarantee cover to loans up to Rs.2 crore to hospitals/nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants, interest rate capped at 7.5%

    12:08 (IST)30 May 2021
    Validity of ECLGS extended

    The validity of ECLGS has been extended to September 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued. 

    12:06 (IST)30 May 2021
    Dinesh Khara talks about SMEs loans, covid-19 resurgence, and RBI's relief measures

    Dinesh Khara opens press conference with talking about loans for SMEs, covid-19 resurgence, and RBI's relief measures of 5 May 2021

    12:01 (IST)30 May 2021
    SBI, IBA joint conference begins

    SBI Chairman Dinesh Khara, Indian Banks Association (IBA) Chairman Rajkiran Rai starts joint conference

    11:59 (IST)30 May 2021
    SBI, IBA joint conference to start shortly

    State Bank of India (SBI) Chairman Dinesh Khara  along with Indian Banks Association (IBA) Chairman Rajkiran Rai to announce some strategic initiatives shortly

    11:56 (IST)30 May 2021
    State Bank of India rating – Buy: Asset quality came as a surprise in Q4

    SBI (standalone) reported 80% y-o-y increase in Q4FY21 net income, driven by 19% y-o-y growth in NII (7% below expectations owing to Rs 21 bn of accrued interest write-off and Rs 8.3 bn of interest-on-interest waiver). Asset quality surprised positively with aggregate of slippages and restructuring at Rs 464 bn against a guidance of Rs 600 bn. The second wave of COVID-19 may cause greater distress in the Tier III & below geographies and SBI could face relatively higher NPLs vs. the first wave.

    Nomura

    11:52 (IST)30 May 2021
    India’s GDP to grow at 1.3 pc in March quarter: SBI report

    The country’s GDP is likely to grow at 1.3 per cent in the fourth quarter of 2020-21 and may see a contraction of around 7.3 per cent for the full financial year, according to an SBI research report ‘Ecowrap’. The e-National Statistical Office (NSO) will release the GDP estimates for the March 2021 quarter and provisional annual estimates for the year 2020-21 on May 31.

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    11:45 (IST)30 May 2021
    Banks to have Covid loan book, says RBI on May 5

    RBI on May 5 announced that banks will have COVID loan book and will earn 40 basis points more under Reverse repo

    11:40 (IST)30 May 2021
    RBI MPC June 2021

    The RBI Governor faces a tough task this time, with a Confluence of challenging parameters emerging in the economy on account of the second wave of covid and lurking uncertainties. The present double-digit wholesale price inflation is going to lead to a rapid jumping of retail inflation too, with a lag effect. This could prompt RBI to shift to a hawkish stance. However, in Revival and sustenance, a bold approach is expected and desired from RBI with no change in repo rate. Jyoti Prakash Gadia, Managing Director, Resurgent India

    11:34 (IST)30 May 2021
    Covid to affect states’ fiscal consolidation plan in FY22: Icra

    The second wave of Covid-19 will weigh upon goods and services tax (GST) collections and states own tax revenues (SOTR) in FY22 as infections are seen curtailing the consumption of discretionary items and contact-intensive services, rating agency Icra said on Thursday. Icra said the state governments’ FY22 budgets had projected a welcome fiscal consolidation after the pandemic-induced disruption in FY21. However, most of these budgets were published before the second surge in Covid-19 infections, which has reignited uncertainty regarding growth and fiscal outlook. 

    11:33 (IST)30 May 2021
    RBI announces on-tap liquidity window of Rs 50,000 cr on May 5

    RBI Governor on May 5, announced on-tap liquidity window of Rs 50,000 crore with tenure of up to 3 years at repo rate being opened till March 31, 2022. RBI also announced targeted long-term repo operation for small finance banks (SFBs) of up to Rs 10,000 crore. 

    11:28 (IST)30 May 2021
    ‘Loan growth promising, banks’ capital base unimpaired’: RBI

    The Reserve Bank of India (RBI) on Thursday said the second Covid wave’s macro-economic cost to the country could hopefully be limited to the June quarter with a possible spillover to July, even as it chose not to alter its GDP growth outlook for FY22 from 10.5%. This turns out to be marginally higher than the recently revised estimates by Moody’s (9.3%) and S&P (9.8%).

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    11:28 (IST)30 May 2021
    Does bank merger help government?

    In 2019, the government announced it would recapitalise banks. The move made a Rs 48,000 crore hole in the government's coffers. Further, this year Rs 20,000 crore worth of bank recapitalisation is planned.  The hope with bank merger is that the government would have to eventually spend less on recapitalising, as banks would have better capital buffers. 

    11:28 (IST)30 May 2021
    Asset quality of banks needs to be closely monitored, warns RBI

    The Reserve Bank of India (RBI) on Thursday said that asset quality of the banks would need close monitoring along with their preparedness for higher provisioning in coming quarters.In its semi-annual financial stability report, RBI had earlier said that the bad loan ratio of banks could rise to 13.5% under the baseline stress scenario by September 2021. The regulator has cautioned banks as lenders will have to show true picture of bad loans after Supreme Court lifted interim stay on classifying non-performing assets (NPA) in March 2021.

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    11:26 (IST)30 May 2021
    RBI Annual Report: Worst seems to be over for loan growth

    After hitting a three-year low of 5.1% in the first half of FY21, the credit growth gained pace from November 2020 as the economy started opening up after pandemic-triggered lockdowns. In its annual report for the nine-months ended March 2021, the Reserve Bank of India (RBI) said the worst was over for the credit growth.

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    11:26 (IST)30 May 2021
    India needs policy-change reforms: Martin Wolf, Chief Economics Commentator, Financial Times

    The Indian economy has been slowing, now at 5-6 percent range, and will need quite a bit of policy-change reforms, in a difficult world environment, to be successful in the decade ahead,” said Martin Wolf, Chief Economics Commentator, Financial Times. He was in conversation with Anil Sasi, National Business Editor, The Indian Express.

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    11:24 (IST)30 May 2021
    Is a bad bank coming soon?

    The Finance Minister had in her Union Budget speech had proposed to set up an Asset Reconstruction Company (ARC) to manage the non-performing assets (NPA). The ARC would take over the bad assets of banks and then sell these to AIFs (alternate investment funds).

    11:23 (IST)30 May 2021
    Banking sector moves in tandem with macro environment: SBI chairman Dinesh Khara

    There would be some impact, as the banking sector tends to move in tandem with the macro environment. Overall, slippage and restructuring applications for FY21 stood at Rs 46,416 crore, well below guidance of the bank. A definitive assessment of the impact of Covid-19 is dependent upon circumstances as they evolve in the subsequent period, said SBI chairman Dinesh Khara

    11:20 (IST)30 May 2021
    SBI NII up 19% on-year in Jan-Mar quarter of FY21

    SBI's net interest income (NII) grew 19% on-year to Rs 27,067 crore. On the back of this, SBI’s operating profit increased 7% on-year and 14% sequentially to Rs 19,700 crore.

    11:19 (IST)30 May 2021
    SBI net jumps 80% on strong interest income, lower provisions

    State Bank of India (SBI) reported an 80% on-year increase in its net profit to Rs 6,451 crore for the March quarter (Q4FY21) on the back of a healthy growth in interest income, improved asset quality and lower provisioning.

    11:17 (IST)30 May 2021
    Experts back mergers

    There have been suggestions by expert committees in favour of merging banks in India. The M Narasimham Committee had recommended that India should have fewer but bigger and better-managed banks to ensure optimal use of capital, the efficiency of operations, wider reach and bigger profitability.

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