SBI to offer Kavach personal loans at 8.5% for Covid-stressed customers

It is a collateral-free offering under which a maximum of Rs 5 lakh can be extended for 5 years

The country’s largest lender, State Bank of India (SBI), on Friday came up with a new loan offering ‘Kavach Personal Loan’ to provide relief to its customers who are facing financial challenges due to covid related treatment costs.

Kavach Personal Loan is a collateral-free offering by SBI, under which a maximum of Rs 5 lakh loan can be availed at 8.5 per cent per annum for a period of 5 years.

“This unique product is being offered under the collateral-free personal loan category and comes at the cheapest rate of interest under this segment. Reimbursement of expenses already incurred for Covid related medical expenses shall also be provided under the scheme”, said SBI in a statement.

“With this strategic loan scheme, our aim is to provide access to monetary assistance – especially in this difficult situation for all those who unfortunately got affected by Covid”, said Dinesh Kumar Khara, Chairman, SBI.

This loan scheme by SBI will be under the Covid loan book that the Reserve Bank of India (RBI) had asked banks to create to provide relief to individuals and institutions affected due to covid. RBI had created a Rs 50,000 crore liquidity window, under which banks were encouraged to borrow at the repo rate from RBI and lend to institutions to strengthen medical infrastructure. Large banks, with ample liquidity, also have been permitted to use their own liquidity to lend to individuals and institutions under the Covid loan book.