The State Bank of India (SBI) recently announced a new personal loan plan – Kavach Personal Loan. The goal is to provide financial assistance to thousands of people severely affected by the second wave of the coronavirus pandemic. The unsecured loan will cover the cost of COVID-19 treatment of the client’s self and family members, the lender said.
“We are pleased to present to you SBI Kavach personal loan program to help those affected as a result of the COVID -19 crisis. We believe this new program will provide much needed financial assistance to people to manage expenses related to COVID treatment without any hassle, ”said Dinesh Khara, SBI Chairman.
SBI Kavach personal loan
Loans under the Kavach personal loan will be unsecured. Borrowers do not need to pledge any assets as collateral when applying for loans under the SBI Kavach personal loan plan. Under this program, clients will have the opportunity to benefit from loans of up to Rs 5 lakh for a period of 5 years. The minimum loan amount has been set at Rs 25,000. The interest will be 8.5% per annum. In addition to the low interest rate and the flexibility of the tenure, the borrower will also benefit from a three-month loan moratorium. “This unique product is offered in the unsecured personal loan category and is offered at the cheapest interest rate in that segment,” the bank said.
Customers can also apply for this loan to pay for their old medical bills. “Reimbursement of expenses already incurred for medical expenses related to COVID-19 will also be provided under the program,” SBI said in a statement.
Individuals, including employees, non-employees and retirees, will be eligible for the SBI Kavach personal loan program. Borrowers can apply for loans through the SBI online banking portal. “With this strategic loan program, our aim is to provide access to monetary assistance – especially in this difficult situation for all those who have unfortunately been affected by COVID,” Khara added.
“It is our constant effort at SBI to work on creating financial solutions for clients that meet their needs,” he added.
This loan product will be part of the COVID loan portfolio created by banks as a result of COVID relief measures by the Reserve Bank of India (RBI). “In these difficult times, SBI is committed to supporting clients’ financial urgency for the treatment of covid and other personal expenses to effectively overcome the COVID battle,” SBI said.
Banks have finalized three sets of products to create a COVID book under the RBI liquidity plan. The measures include a loan to healthcare companies for setting up oxygen factories, business loans for healthcare facilities and unsecured personal loans for COVID-19 treatment. The rates on loans for oxygen plants will be charged at 7.5 percent.
“The resurgence of the COVID-19 pandemic in India in recent weeks and the associated containment measures adopted at the local / regional levels have created new uncertainties and impacted the nascent economic recovery that was taking shape. In this environment, the most vulnerable category of borrowers are individual borrowers, small businesses and MSMEs, ”said RBI Governor Shaktikanta Das.
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