The spread of coronavirus across the globe has created a big dent on the financial conditions of everyone. With pay cuts, salary delays and even lay-offs, there is hardly any money coming in people’s bank account. In this situation, people who forget to maintain a minimum balance in their accounts get charged with hefty fines.

Amidst all this, top banks such as Axis Bank, Kotak Mahindra Bank and Bank of Maharashtra have announced a revision in the penalty charges of non-maintenance of minimum balance. The penalty has increased and so has the troubles of common people.

The Best Way Out: Open A Zero Balance Savings Account

One of the best ways is to open a zero balance savings account. If you are a salaried employee, chances are high that you already have it. Otherwise, you can also open one online.

Be it SBI, HDFC or ICICI or Kotak Mahindra, almost all the leading banks offer this zero balance savings account that offers various features and benefits. Some of the best ones include:

·     No Need to Maintain Minimum Balance: As the name suggests, you do not need to maintain a minimum balance, unlike a normal savings account. You will not be charged with any penalty even if you have no balance in the account.

·     Easy Transactions: Zero balance accounts offer net banking, allowing you to make easy cash transactions. You can use this option to pay your bills and make payments online.

·     Free Debit Card and ATM access: A zero balance account also offers you ATM access with Debit card across all the outlets.

·     Mobile Banking: Banks also offer mobile banking services with zero balance account which you can easily access from your smartphone. From checking your bank balance to making transactions and paying utility bills, you can use all these services easily through your mobile.

·     Interest Rates: In some banks, the interest rate on a zero balance saving account is the same as that on a regular saving bank account.

Apart from the features listed above, you can also avail various other benefits such as banking on Whatsapp, Virtual Debit Card, Personalized account number and so on.

Different banks offer different features of zero balance account but one thing that remains the same is that you do not have to maintain a minimum balance.

 For more such articles and updates from the banking sector, keep browsing bankingontips.com.

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In his speech of making India 'Atmanirbhar' (self-dependant), Prime Minister announced a boost of Rs. 20 Lakh Crore to the Indian Economy. Out of this Rs. 20 Lakh Crore, around Rs 1.37 lakh crore was sanctioned to MSMEs, under Emergency Credit Line Guarantee Scheme (ECLGS). But, to give relief to a broader set of people, Govt. of India has now announced that this ECLGS scheme will now also cover individual entrepreneurs.

Earlier, this used to cover only loans availed for Micro, Small, and Medium Enterprises, but with this new announcement, personal loans given for business purposes will also be counted under the ECLGS scheme.

Eligibility Criteria

A number of MSME organizations and market chambers suggested to the finance ministry that they should broaden their eligibility criteria to include individual entrepreneurs under this scheme. A great chunk of loan borrowers (around 80-90 percent) who had taken loans from NBFCs for their business tools or vehicles were ineligible for the Emergency Credit Line Guarantee Scheme yet.

With this change, individual business persons like cab or truck drivers, shop owners, lawyers, doctors, engineers, etc. will also be eligible for the loan.

However, the catch is that first-time loan borrowers can not get new loans under this scheme. People who have already taken loans from banks to Non-Banking Financial Companies can stretch their loans.

What Are The Benefits?

Talking about the scope of this new development, Debasish Panda, Secretary of Department of Financial Services said to the media, "A total of around Rs 1.37 lakh crore has been sanctioned under the scheme by member lending institutions to around 40 lakh accounts, of which around Rs 87,000 crore has been disbursed. The changes in the ECLGS scheme are likely to make an additional Rs 1 lakh crore eligible."

Companies that have an annual turnover of up to Rs 250 crore but have an outstanding loan of the amount up to Rs 50 crore can now avail an additional loan of up to 20%. This implies that individual entrepreneurs will now be eligible to get around Rs 10 crore as additional financing, instead of just Rs 5 crore.

To make sure that lenders don't charge too much from the borrowers, the central government has capped the interest rates. For banks and financial institutions, loans under the ECLGS scheme can only charge an interest rate of 9.25 percent per annum, while for Non-Banking Financial Companies, this cap is up to 14 percent interest rate per annum

According to market insiders, if executed before the prescribed date, this scheme can boost the economy enough that it can gain a stable momentum afterward.

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In the wake of ongoing coronavirus crisis, Reserve Bank of India (RBI) held two separate meetings with the heads of various public and private sector banks. The meeting was held online through video conferences. Understanding the importance of it, the meeting was attended by Governor Shaktikanta Das, Deputy Governor and senior officials of RBI along with the MD and CEOs of major public and private sector banks.

One of the most important discussions was made on the implementation of 3 months moratorium of the repayment of bank loans. 

As per the reports, many banks have requested the RBI to extend the grant to another 3 months to the borrowers owing to the pandemic outbreak. However, some banks are not ready to allow NBFCs the benefit of 3-month moratorium.

As per sources, Bank of India, Bank of Baroda and Indian Bank were in favour of giving moratorium relief to NBFCs, while State Bank of India (SBI) had continued to stay on the other side of the discussion. 

However, RBI conveyed that NBFCs are covered under `borrowers' to be eligible for a moratorium; thus, giving them a chance to stay afloat during this crisis. This step by RBI can be the result of complaints by the NFBCs claiming they are being deprived of the moratorium. 

Along with this statement, RBI also said that banks can also use their discretion to decide the eligibility of firms based on their credit and liquidity profile.

Earlier, RBI had announced a moratorium on loan EMIs and credit card dues between the period of March 1, 2020, and May 31, 2020.

Other Points Discussed in the Meeting

As per the official website of RBI, the meetings aimed to review the current economic situation and discuss crucial matters to ensure the proper functioning and stability of the banking sector of the country. 

The meeting touched upon various matters including review of the flow of credit to different sectors of the economy, "including liquidity to Non-Banking Financial Companies, Micro Finance Institutions, Housing Finance Companies, Mutual Funds, etc." They also discussed the post lockdown credit flows with a special focus on credit flows to MSMEs.

Apart from this, monitoring of overseas branches was also done since coronavirus is affecting the economies of all over the world. 

The lenders also highlighting the fact the relief by the government is not enough since 80% of their corporate borrowers are working in the red zones where hardly any relaxation is offered in terms of business revival.

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