India extends $54.8 billion loan-guarantee offer to airlines and hospitals

INTERNATIONAL DESK: India expanded an emergency credit programme to airlines and hospitals to cushion them from the impact of a wave of coronavirus infections and deaths, The Straits Times and Bloomberg report.

The loans, which were previously intended for specific sectors such as small borrowers, can be availed until Sept 30 or until total guarantees worth 3 trillion rupees (S$54.8 billion) are offered, the Finance Ministry said in a statement on Sunday (May 30).

So far, about 2.5 trillion rupees have been disbursed, Mr Sunil Mehta, chief executive of the Indian Banks’ Association, said at a subsequent briefing.Prime Minister Narendra Modi‘s administration is turning its focus to protecting the economy as a devastating surge of Covid-19 infections ebb.

While he eschewed a national lockdown in favour of localised mobility curbs, demand is still weak following a recession last year and a recent wave of infections that killed more than 150,000 people amid a severe shortage of basic medical facilities, including hospital beds and oxygen.

The enhanced programme will guarantee loans worth 20 million rupees to hospitals and clinics to set up on-site oxygen generation plants.Interest rates will be capped at 7.5 per cent.

Small companies can borrow an additional 30 per cent of their credit limit, up from 20 per cent announced last year. Some eligible borrowers can extend the tenor of their loans by a year.