An additional fund of 10 per cent above the sanctioned working capital loans is what the govt is looking forward from banks. As an emergency measure, it is not allowing to grant above INR 2 billion per account.

The center has asked all the lenders to extend emergency credit lines to support loan takers especially corporates. Additional fund of 10 per cent above the sanctioned working capital loans is what the govt is looking forward from banks. As an emergency measure, it is not allowing to grant above INR 2 billion per account.

 Government and banking sources said that this is to tackle the fallout from the coronavirus epidemic that has led to downfall of business across the globe. India's largest lender, State Bank of India (SBI), has already deployed out this emergency credit line and the other state-owned lenders are also expected to follow the same as soon as possible.

Even before the economic crisis of the country get stable, the corona outbreak has led India's economy expand at its slowest pace in more than six years in the last three months of 2019 and analysts have predicted a further deceleration caused by this. The pandemic has ignited concerns about the health of the small and medium-sized enterprises that have already been hammered by a slowing economy.

In regards with this, lenders have also asked the banking regulator to ease bad loan classification rules and also to extend loan repayments by six months across categories spanning industry, agriculture and retail customers. Shadow banks that have already begun to see an impact on repayment caused by the Covid-19 pandemic have made similar request to the govt and RBI.

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