PSBs told to fix one hour loan products for MSMEs
At a meeting on Monday, the ministry has said all banks, which are now on board, will have at least one common product with the option to offer variations, enabling small businesses to meet their term loan and working capital needs through an online platform that will be contactless.
debt-equity ratio and the number of years for which tax returns had to be submitted. The government has now asked us to have fixed norms for a lot of things,” said a banker.
Sources said banks have been told to offer loans to companies with a debt-equity ratio of 4:1, given that MSMEs typically have a lower equity base. Similarly, these borrowers will need a credit ratio or debt-to-income-ratio of 1:1.
With two private lenders, HDFC Bank and ICICI Bank, also showing interest in the new portal, sources indicated that the platform may be opened to those outside the public sector too.
Last month, the government had announced funding of up to Rs 1 crore in 59 minutes flat for MSMEs. The facility is available for businesses that submit GST and income tax details, along with their bank statements, for speedier loan sanctions. The loan will be disbursed within eight days.
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