State Bank of India (SBI) recently announced a new personal loan plan – Kavach Personal Loan. The aim is to provide financial relief for thousands of people who have been severely affected by the second wave of the coronavirus pandemic. The security-free loan will cover the cost of COVID-19 treatment for the client’s self and family members, the lender said.

“We are excited to launch the SBI Kavach Personal Loan Program to help people affected by the COVID-19 crisis. We believe this new program will provide much-needed financial support for people to easily manage expenses related to COVID treatment, “said Dinesh Khara, chairman of SBI.

SBI Kavach personal loan

The Kavach Personal Loan Loans are security-free. Borrowers are not required to pledge any assets as collateral while applying for the loans under the SBI Kavach Personal Loan Plan. Under this program, customers are given the opportunity to avail loans of up to Rs 5 lakh for a period of 5 years. The minimum loan amount was set at Rs 25,000. The interest is 8.5% per year. In addition to the low interest rate and the flexible term, the borrower also receives a three-month credit moratorium. “This unique product is offered in the security-free personal loan category and is available at the lowest interest rate in this segment,” said the bank.

Customers can also apply for this loan to cover their previous medical expenses. “The reimbursement of costs already incurred for COVID-19-related medical costs will also be provided under the program,” SBI said in a press release.

Individuals, including employees, non-employees and retirees, are eligible for the SBI Kavach personal loan program. Borrowers can apply for loans through the SBI online banking portal. “Our goal is to use this strategic loan program to provide access to monetary aid – especially in this difficult situation for everyone who is unfortunately affected by COVID,” added Khara.

“It is our constant aim at SBI to develop financial solutions for clients that meet their needs,” he said.

This loan product will be part of the COVID loan book created by banks following the Reserve Bank of India (RBI) COVID relief efforts. “In these troubled times, SBI is committed to taking care of customers’ financial plight for Covid treatment and other personal expenses in order to effectively overcome the COVID battle,” said SBI.

Banks have completed three product groups to build a COVID book as part of the RBI liquidity scheme. The measures include a healthcare business loan to set up oxygen facilities, healthcare facility business loans, and unsecured personal loans to treat COVID-19. The loan interest for oxygen systems is calculated at 7.5 percent.

“The resurgence of the COVID-19 pandemic in India in recent weeks and the associated containment measures at local / regional level have created new uncertainties and influenced the emerging economic recovery. In this environment, individual borrowers, small businesses and MSMEs are the most vulnerable category of borrowers, ”said RBI Governor Shaktikanta Das.

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