The State Bank of India (SBI) on Friday introduced a collateral-free loan called 'Kavach Personal Loan' for its customers facing financial stress due to COVID treatment-related expenditures.
The state-run lender, under the scheme, is providing collateral-free personal loans of up to Rs 5 lakh at an 8.5% annual interest rate, aimed at helping customers meet medical expenses of self and family members for COVID-19 treatment.
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The scheme will enable buyers "avail loans of up to 5 lakh at an effective interest rate of 8.5% per annum for 60 months which is inclusive of three months moratorium," SBI said in a statement.
"This unique product is being offered under the collateral-free personal loan category. Reimbursement of expenses already incurred for COVID related medical expenses shall also be provided under the scheme," the bank added.
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The 'Kavach Personal Loan' will also be part of the COVID-19 loan book being created by banks in line with RBI's COVID relief measures, SBI further noted.
"We believe this new scheme will offer much-needed financial assistance to the people to manage the COVID treatment-related expenses without any hassle. 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 Khara, Chairman, SBI.