Banks will now lend to COVID-19 patients who need money for treatment

COVID-19 patients can find some respite now after the Reserve Bank of India Governor Shaktikanta Das' announcements on Wednesday. The apex bank in an attempt to save lives and livelihoods has incentivised banks to lend to coronavirus patients who need money for treatment. This will prove to be a relief as it will help counter enormous bills that patients and family members have time and again said that they had to foot.

This is part of a Rs 50,000 lending programme that the RBI announced today. The governor announced that in an attempt to ramp up COVID-related healthcare infrastructure, on-tap liquidity window of Rs 50,000 crore with up to 3-year tenor at repo rate has been opened up till March 31, 2022.

"Banks may deliver these loans to borrowers directly or through intermediary financial entities regulated by the RBI. Banks are expected to create a COVID loan book under the scheme. By way of an additional incentive, such banks will be eligible to park their surplus liquidity up to the size of the COVID loan book with the RBI under the reverse repo window at a rate which is 25 bps lower than the repo rate or, termed in a different way, 40 bps higher than the reverse repo rate," stated the governor.

Banks will be able to support entities including vaccine manufacturers, medical facilities, hospitals as well as patients under the scheme. This lending will get priority sector classification till repayment or maturity. The window for such loans will remain open till March 31, 2022, stated the governor.

"Under the scheme, banks can provide fresh lending support to a wide range of entities including vaccine manufacturers; importers/suppliers of vaccines and priority medical devices; hospitals/dispensaries; pathology labs; manufactures and suppliers of oxygen and ventilators; importers of vaccines and COVID related drugs; logistics firms and also patients for treatment," stated the governor.

Also read: Big boost for vaccine producers, pharma players! RBI unleashes Rs 50,000 cr liquidity for emergency healthcare

Also read: RBI Governor Speech Live Updates: Banks to be incentivised for quick lending amid 2nd Covid wave