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Boost to MSMEs: `14K-cr of loans cleared since Nov under 59-minute scheme

Of the 1.12 lakh applications that have received approval, sanctions have been made in respect of 40,669 cases. (Representational)

In a big rush to provide credit to micro, small and medium enterprises (MSME), the state-owned banks have sanctioned loans worth over Rs 14,000 crore under the 59-minutes scheme launched by the government only last month. Data made available by the government shows that while a total of 1,31,028 applications were received by the banks at the portal, since the scheme's launch on November 3, 2018, 1.12 lakh loan applications received in principle approval till December 25.

Of the 1.12 lakh applications that have received approval, sanctions have been made in respect of 40,669 cases. With a total sanction amount of Rs 14,088 crore, the average sanctioned loan amount works to Rs 34.6 lakh.Among the banks that have taken the lead in sanctioning the 59 minutes loan over the last 7 weeks are Ban of Baroda and Union Bank of India. While Bank of Baroda has sanctioned loans worth Rs 3,774 crore, Union Bank of India has sanctioned loans worth Rs 2,338 crore. The two banks account for over 43 per cent of the total sanctioned amount.

While the State Bank of India has received the largest number of applications and accounts for nearly 30 per cent of the loans that have received in principle approval, the largest public sector bank has sanctioned only 4,416 loans worth Rs 1,582 crore. So, SBI has been going slow on sanctioning. If Bank of Baroda's sanctioning to loan approval ratio stands at 77 per cent, that of SBI and Punjab National Bank is low at 13.33 per cent and 8.6 per cent respectively.

Other banks that have sanctioned loans worth over Rs 1,000 crore are Central Bank (Rs 1,352 crore) and Bank of India (Rs 1,006 crore). On the other hand four banks have sanctioned less than Rs 50 crore in the same period under the 59 minute loan scheme. While SIDBI has sanctioned 42 loans worth Rs 15.45 crore, Syndicate Bank, UCO Bank and United Bank of India have sanctioned loans between Rs 30 crore and Rs 40 crore.

The government launched the 59 minute online loan portal along with a series of other measures to boost fund flow to the Micro, Small & Medium Enterprises (MSME) on November 3, 2018.The measures included providing GST-registered MSMEs access to cheaper credit by way of an interest subsidy on fresh loans, and mandating state-owned companies to procure at least 25 per cent of their product requirements from smaller firms, among others.

MSMEs that were registered on the GST platform were to be given two per cent interest subsidy on fresh loans, while a portal was started to provide sanction on loan up to Rs 1 crore within 59 minutes.The portal is developed, operated and maintained by Online PSB Loans Limited, formerly known as Capita World Platform Private Ltd. The portal assesses the creditworthiness of the applicant through data analysis of GST returns, tax returns and bank account statements.The Reserve Bank of India data on deployment of gross bank credit till October-end this year shows that credit to industry has grown by 3.6 per cent year-on-year.
Within this broad category, credit to micro and small enterprises has increased 1.6 per cent, and to medium enterprises by 10.9 per cent. In contrast, credit to the services sector has posted a phenomenal growth of 27.4 per cent, while overall non-food credit has grown at 13.4 per cent.

A couple of bankers in conditions of anonymity said that they have been told to take quick decision on the applications and "approve or decline" the application within 3-4 days and this is leading to faster sanctioning. "Once the application comes to us, we have to take a decision on its sanctioning in 3-4 days based on the documents provided and the credit history of the customer," said a branch manager with a PSB, who did not wish to be named.

Some bankers said that Gujarat and Maharashtra is leading among the states in terms of the sanctioning of the loans.