Indian Overseas Bank Introduces Special Loans for Self Help Groups

CHENNAI:
Indian Overseas Bank (IOB), a leading Public Sector Bank in India has introduced a special loan scheme for Self Help Group (SHG) borrowers as emergent financial assistance to fight against COVID pandemic.

The scheme is valid up to 30th June, 2020. The eligibility for availing this loan is that the borrowers need to have a good track record and should have availed a minimum of two doses of credit from the Bank. As per the Bank’s rule only those SHGs whose existing loans are standard and performing as on 01.03.2020 are eligible to avail loan under this special scheme.

In order to avail this loan the SHG borrowers can submit their applications either to the Branch directly or through Business Correspondents. The loan amount will be disbursed in the savings account of the SHG. The maximum loan amount is @Rs.5,000/= (Rupees five thousand only) per each member of the group with a cap of Rs.1,00,000/= (Rupees one lakh only) for the group.

The loan would be sanctioned and disbursed within 6 working days from the date the SHG submits the application along with the required documents to the branch. The loans under the scheme are repayable in 30 EMIs after initial moratorium of six months. The rate of interest for these loans is 1 year MCLR (8.25%) + SP (0.2) + RP (0.95) (Currently 9.4%).”

Karnam Sekar, MD & CEO of Indian Overseas Bank said, “Self Help Group borrowers are an important part of the economy because they mutually help each other in the group for social and economic purposes. Therefore we are working to the best of our ability to extend our support to SHGs and help them in the wake of Coronavirus.

Our efforts are aligned with the Govt. of India’s advice to help all sectors in the economy to function properly and sustain amidst the crisis at hand. These loans will assist the SHGs pass through the difficult times they are encountering in the present scenario.”

Borrowers will not be charged with any pre-payment charges or processing fee for the sanction of loans under the special scheme to Self Help Groups. Also these loans will have no correlation with the corpus of the SHG. Moreover, to encourage this segment of borrowers no additional security will be required from the group.