India raises corporate loan guarantees to $ 60.7 billion – News


India has extended a federal guarantee on bank loans to health and tourism services to protect them from the devastating impact of the pandemic and has also removed visa fees for 500,000 foreign tourists.

India’s finance minister said on Monday that the government, as part of its efforts to revive the pandemic-stricken economy, would extend federal guarantees on business loans to 4.5 trillion rupees ($ 60.7 billion ) from an earlier limit of 3 trillion rupees. .

Finance Minister Nirmala Sitharaman said the government will provide a guarantee of Rs 1.1 trillion on loans to the health sector and medical infrastructure to enable them to obtain loans at a lower interest rate of 8 at 8.25% per year.

The Emergency Line of Credit Guarantee Program, launched last year, has helped cash-strapped small businesses raise funds during the Covid-19 lockdown for their working capital and to fulfill their orders.

The government will extend the benefits of the free food grains program for the poor, launched last year, until November, which will cost 938.7 billion rupees, bringing the total cost of the program to more than 2.27 trillion rupees. , she said.

Sitharaman said that under the new loan guarantee program for sectors affected by Covid, working capital or personal loans will be provided to people in the tourism sector to pay off debts and restart businesses affected by Covid-19.

Loans will be given to registered tour guides and other actors in travel and tourism with a 100% guarantee. Loans of up to Rs 1 trillion would be available with collateral for regionally or state approved tour guides. A total of 10,700 regional-level tourist guides recognized by the Ministry of Tourism and state governments would benefit from the program.

In addition, loans with an upper limit of Rs 1.0 million would be available with a 100% guarantee for travel and tourism actors such as travel agencies.

The loans, which were previously intended for specific sectors such as small borrowers, can be used until September 30 or until total collateral worth three trillion rupees (54.8 billion rupees). dollars) are offered.

The improved program will guarantee loans worth Rs 20 million to hospitals and clinics for the establishment of on-site oxygen production plants.

Interest rates will be capped at 7.5 percent. Small businesses can borrow an additional 30 percent of their credit limit, up from the 20 percent announced last year. Some eligible borrowers may extend the term of their loans by one year.

So far, around 2.5 trillion rupees has been disbursed, Sunil Mehta, chief executive of the Association of Indian Banks, said in a briefing.

“More proactive steps are being taken to alleviate any difficulties that the sector might encounter,” Dinesh Khara, chairman of the State Bank of India, said at a press conference.

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Issac Jean

Editorial Director of Khaleej Times, is a well-connected Indian journalist and economic and financial commentator. He has worked in mainstream journalism in the United Arab Emirates for 35 years, including 23 years with the Khaleej Times. A graduate in English and a graduate in economics, he has won more than twenty awards. Acclaimed for his genuine and insightful analysis of global and regional business and economic trends, he is respected for his astute understanding of the local business scene.

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