Finance Minister Arun Jaitley has launched a portal to enable micro, small and medium enterprises (MSMEs) to get in-principle approval of loans within an hour without the need for a branch visit.
The web portal, www.psbloansin59minutes.com, will enable in-principle nod for loans up to Rs 10 million within 59 minutes for MSMEs, financial services department secretary Rajiv Kumar said.
The portal is for securing loan approvals only from Small Industries Development Bank of India, and five public sector banks (PSB) — State Bank of India (SBI), Bank of Baroda, Punjab National Bank, Vijaya Bank, and Indian Bank.
The turnaround time of loan processing will reduce from 20-25 days to 59 minutes, the finance ministry said. “Subsequent to this in principle approval, the loan will be disbursed in 7-8 working days,” Kumar said.
The loan processing will take place without any manual intervention till sanction or disbursement stage and the MSME borrower will not be required to submit any documents physically for in-principle approval.
Kumar said the MSMEs face various challenges, including queries and verification checks, non-standard procedures, manual appraisal process, among others. The platform will be integrated with the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme for checking the eligibility of borrowers.
“The solution uses sophisticated algorithms to read and analyse data points from various sources such as IT returns, GST data, bank statements, MCA21, etc. in less than an hour while capturing the applicants basic details using Smart analytics from available documents,” the ministry said.
Jaitley criticised former RBI governor Raghuram Rajan on his prediction that the next banking crisis would be triggered by MSME lending, saying that they could be the sources of next banking crisis.
The ministry announced releasing an annual financial inclusion index to measure access and usage of a basket of formal financial products and services that includes savings, remittances, credit, insurance, and pension products.