Starting October 1, 2025, a major financial initiative is being rolled out by India’s top public sector banks—State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda (BOB). These banks will offer pre-approved credit of up to ₹1 lakh to eligible customers, aiming to provide easier access to short-term funds during emergencies or financial gaps.
Let’s take a closer look at this new facility and what it means for everyday banking customers.
What is the ₹1 Lakh Credit Facility?
This facility is essentially a pre-approved, short-term loan that can be directly accessed by selected account holders. It acts like a credit line, allowing eligible customers to withdraw up to ₹1 lakh without undergoing the usual loan application process.
The credit amount will be linked to the customer’s existing savings or salary account, making it quick and easy to access funds when needed—whether for medical expenses, urgent home repairs, or even business needs.
Who is Eligible?
Not all customers will get this credit automatically. Banks will assess eligibility based on:
- Account history and transaction patterns
- Credit score and repayment behavior
- Duration of account with the bank
- Income flow and financial stability
If eligible, the customer will be informed via SMS or email notification. Only then will they be able to access the pre-approved amount.
How Will It Work?
Once approved, the credit limit will be instantly available in your account. You can use it through:
- ATM withdrawals
- Net banking or mobile apps
- Cheque transactions
Repayment terms are expected to be flexible, generally within 30 to 90 days, and interest rates will be lower than personal loans or credit cards, making this a more affordable borrowing option.
Why This Move Now?
This initiative comes at a time when the focus is on financial inclusion and digital banking expansion. By offering quick, hassle-free credit, these banks aim to:
- Help customers avoid high-interest informal loans
- Strengthen customer relationships
- Support small businesses and salaried individuals during cash crunches
- Promote responsible credit usage through pre-approved facilities
What Are the Benefits?
- Fast access to credit with minimal paperwork
- Lower interest rates compared to traditional credit options
- No need for fresh documentation for each borrowing
- Builds credit history when repayments are made on time
- Helps in avoiding loan sharks or unregulated lending sources
Points to Keep in Mind
While this facility offers convenience, it is still a loan. Customers must repay it on time to avoid penalties and damage to their credit scores. Misusing it or depending on it regularly can lead to financial stress.
Also, not everyone will qualify—the facility is selective and based on the bank’s assessment. Transparency and clear communication from the banks will be important to avoid confusion.
This new ₹1 lakh credit facility from SBI, PNB, and BOB is a welcome step in simplifying access to emergency funds. It’s especially helpful for those who need small-ticket loans without the stress of approvals and paperwork. If used wisely, this feature can help customers manage their finances better while staying out of debt traps.
As the scheme launches in October, eligible customers should keep an eye on official bank notifications and read the terms carefully before using the credit.
Responsible borrowing is key—because while access to credit is getting easier, using it wisely is what truly builds financial health.