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GST: Banks clear MSME loans worth Rs 30,000 crore via 59-Minute portal - GST Station

GST: Banks clear MSME loans worth Rs 30,000 crore via 59-Minute portal

GST: Banks clear MSME loans worth Rs 30,000 crore via 59-Minute portal

    The psb loans in 59 minutes portal — a central government initiative to provide in-principle approval for small business loans of up to Rs 1 crore from public sector banks and Sidbi in less than an hour — has seen around Rs 30,000-crore loans sanctioned since its launch in September. 

    The government is hopeful that credit offtake will see a further jump as banks transmit the 25 basis rate cut announced by the Reserve Bank of India earlier this month, a government official told ET. 

    Last week the central bank had in its bi-monthly monetary policy reduced the key policy rates by 0.25%, the first rate cut since August 2017. 

    “We have 24,000 new borrowers who took loans through this portal of around Rs 6,400 crore,” the official said, adding that over 68,000 repeat borrowers have been sanctioned loans of around Rs 23,439 crore. 

    “There is now less human interference in the sanctioning process,” a finance ministry official said. “Also, since the loan documentation is done through the portal itself, it also creates a liability on the approving authority to give reasons for delays and denials.” 

    Borrowers have to submit details such as IT returns, GST data and bank statements to avail the credit facility through this portal. 

    A bank executive said they are trying to further speed up the loan disbursement process based on the documentation provided by borrowers. “We are looking to make this a fully automated process in case of firms where documentation is complete,” he said, adding that so far banks have also not reported any delinquencies in such loans. 

    At present, after a borrower gets an in-principle approval through the portal, the loan is disbursed within a week. 

    The above quoted finance ministry official said the recent structuring of MSME loans announced by RBI will further boost the industry. 

    Earlier, financial services secretary Rajiv Kumar had said the restructuring package for MSMEs will help recast Rs 1 lakh crore of loans for seven lakh eligible small businesses. “The scheme will help free up additional resources, which will fuel demand and create further opportunities in the industry,” he had said. 

    In January, RBI allowed a one-time restructuring of existing loans to MSMEs that are in default but ‘standard’ as on January 1, 2019, without an asset classification downgrade. 

    Source- Economic Times.

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