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Three in every 100 serious or hospitalised patients during the second wave in Odisha had banked heavily on the public sector banks to meet the treatment expenditure.
Moreover, the enormity of household distress that prevailed during the second wave in the State can well be ascertained from the fact that Sambalpur district saw deposit outflow of Rs 10 billion or over Rs1000 crore during the peak period (April-May).
A State Bank business data analysis shows only five districts in the country had recorded such a huge deposit outflow during the Covid-19 second wave peak, and Sambalpur is one among them.
Covid Cost Breaks The Banks?
As per the data available, during the second wave peak (till June 15), Odisha saw hospitalisation of over 1.6 lakh. And a whopping 5,522 had taken collateral-free loans from the public sector banks in the State, informed a senior SLBC official here.
A total of 6 banks, namely, State bank of India, Canara Bank, Bank of India, Punjab National Bank, Bank of Baroda and Union Bank of India have provided a collateral-free loan facility for salaried, non-salaried and pensioner account holders.
Under the Covid-19 relief measures announced by RBI, these nationalised banks had launched this loan scheme, whereby, an individual account holder can apply for the loan amount that ranges between Rs 25000- to Rs 5 lakh. While the repayment tenure has been fixed at 5-years, the rate of interest charged was 6.85 - 8.5 percent. The scheme also has the feature of a loan moratorium for 3-6 months.
"With a severe crunch of beds in government hospitals, especially in western Odisha, many had gone for treatment in private hospitals. Despite caps announced by the Odisha government, the treatment cost on average runs to around over 4 lakhs per family. As the loan scheme is meant for the treatment of self or family members of the account holders, in a family where more than one member went for hospitalisation had relied on the Covid-19 personal loan scheme of public sector banks," informed the senior SLBC official.
Who Are The Beneficiaries?
This collateral-free loan scheme by PSBs has been availed in Odisha by account holders who either had drawn continuous salaries for the last 1-year or non-salaried ones who file regular I-T returns.
Since no salary value has been assigned, the eligibility criteria shows salaried account holders in the State with little savings have relied on the loan scheme. If SLBC sources are to be believed, nearly 60 percent of beneficiaries belong to the income group of below Rs 2.5 lakh per annum.
District Wise Stress
As many as 8 districts with high active caseload during the peak period in the second wave in the State had seen huge outflow of deposits. Sambalpur led the table. The heavy outflow had also been witnessed in the districts of Khordha, Cuttack, Sundargarh, Bargarh, Jharsuguda, Balasore and Angul.
Other Important banking trends seen in peak period are:
- Premature withdrawal of term deposits.
- Default on tern loan payments
- Spike in home loan NPAs
As per the senior SLBC official, the above banking trend has been linked to Covid-19 because the aforementioned banking trend change has been observed in branches of the area where the caseload had been very high.
"Deposit accretion has been witnessed in the least affected blocks in the State. The contrasting scenario in high load block is self-explanatory," she observed.
