RBI panel wants govt loan portal to reach out to startups
BENGALURU: Government-promoted online loan application platform Psbloansin59minutes should expand coverage and extend loans to startups, an expert committee on micro, small and medium enterprises said on Tuesday.
Psbloansin59Minutes, which caters to funding for MSMEs, also needs to track data from other sources besides tax filings through the Goods and Services Tax (GST) network and bank statements, the panel said in a report. “The committee recommends that the portal should also cater to new entrepreneurs, including those applying for loans under the Pradhan Mantri Mudra Loan Yojana and Stand-Up India,” it said.
The Reserve Bank of India constituted the committee led by former Securities and Exchange Board of India chief UK Sinha. The panel, which had eight other specialist members, submitted the report on June 19 and it was made public on Tuesday. Applications should be disposed of 7-10 days from the time they get in-principle approval from the platform, the panel recommended. “Further, the portal should be linked to land records, Central Registry of Securitisation Asset Reconstruction and Security Interest and Credit Guarantee Fund Trust for Micro and Small Enterprises,” it said.
The online platform is a central government initiative that is managed by the Small Industries Development Bank of India (Sidbi).
The platform permits both private and public sector banks to participate in loan disbursal. While government-owned banks were the first on the platform, Kotak Mahindra Bank was the first private sector lender to join the initiative.
When businesses apply for loans, they are assessed through various sources like GST data, tax filings, bank statement of the proprietors and their businesses. Based on the assessment, they are offered an inprinciple approval letter, which enables them to get bank credit.
The committee has suggested the formation of a joint working group of the Indian Banks’ Association and Sidbi to iron out issues pertaining to creation of new MSME lending products and reducing turnaround time during the centralised sanctions stage.