Coronavirus: Banks offer fresh lines of credit to SME firms amid lockdown

With the financial year ending on March 31, small- and mid-sized companies are likely to default en masse, while rating agencies will have to mark them in the 'default' grade

Despite State Bank of India, Bank of India, and Bank of Baroda announcing fresh credit lines for troubled companies, they are expecting a series of defaults by small and medium companies as the financial year draws to an end. Union Bank and Indian Bank also announced similar measures to increase working capital limits.

Banks are also asking the Reserve Bank of India (RBI) to delay non-performing asset (NPA) classification by three months (from the end of 90 days of non-servicing of loan). If a loan is not serviced for 90 days, it becomes a bad debt for the bank and