State Bank of India (SBI) chairman Rajnish Kumar said, Public sector banks are moving up to introduce retail products, including housing and auto loans, on the ‘psbloansin59minutes’ portal, with the aim to expand their retail loan business.
Currently, the platform used to sanction loans of up to Rs 1 crore to micro, small and medium enterprises (MSMEs) in just 59 minutes or less than an hour with the submission of documents like goods and services tax (GST) returns, income tax (IT) returns and bank account statements.
Now, the same platform we will use later for retail loans. It can become a very powerful platform. The one thing is we need awareness and the other is that the turnaround time after the sanction must be reduced.
The platform had been launched with 59-minute sanction for loans ranging between Rs 10 lakh and Rs 1 crore. Later, the ceiling was raised to Rs 5 crore for SMEs.
However, some of the banks, including State Bank of India, Union Bank of India, and Corporation Bank, have decided to extend in-principle approval to loans of up to Rs 5 crore through the portal.
Bank of India is also planning to onboard some of the retail products on the portal for easier access to loan products.
Another state-owned lender, Indian Overseas Bank (IOB), also plans to offer retail loan products on the portal. It has been actively participating on the portal for sanction of MSME loans and the bank has achieved an improvement in sanctioning of loans, as the number of cases and amount sanctioned shows a manifold increase since its inception.
Kumar noted “They can apply, they get in-principle approval. I have given written instructions to my people down the line that there is no accountability as far as the amount sanctioned is concerned,”.
“Loans up to Rs 5 crore can be easily done based on data analytics. After that existing process, it is still use of data, but manual judgment and decision-making will come in.”
Ashok Saigal, co-chair of CII MSME Committee said that “As against sanctioned, only 10% is being disbursed by banks under 59-minute scheme,”.
Under the scheme, MSMEs registered under the GST are eligible for loan up to Rs 1 crore in just 59 minutes through ‘psbloansin59minutes.com’ portal.
The MSMEs also complained that despite 70% guarantee from the Credit Guarantee Fund Trust for Micro and Small Enterprises, the firms have not been able to secure loans from banks in many cases.