Micro, small and medium enterprises will now be able to get quick overdraft of up to Rs 1 crore for working capital requirements, based on their goods and services tax (GST) returns.
ICICI Bank announced the facility known as ‘GST Business Loan’ on Monday and said it would be available to any such business, including non-customers of the bank.
“This facility brings in the improved convenience of availing of quick OD facility, as it does away with the need for a paper-intensive assessment of financial documents, including balance sheets of previous years,” the bank said in a release on Monday.
MSMEs will be sanctioned the overdraft amount within two working days and the bank will assess their GST returns to assess their eligibility for working capital limit.
“Since GST takes into account comprehensive business flows, we believe that GST returns will change the lending paradigm for MSMEs with faster and hassle-free access to working capital finance from financial institutions,” said Anup Bagchi, Executive Director, ICICI Bank.
The overdraft amount could range between Rs 10 lakh and Rs 1 crore and would be up to 20 per cent of the turnover reported in the GST return. To avail of the facility, MSMEs can give residential, commercial or industrial property as collateral security. The customer will also not have to show any financial statements.
It is renewable on an annual basis, depending on the repayment track record of the overdraft facility by the customer, ICICI Bank further said. With over one crore MSMEs registered with the GST Network, the lender is hopeful that the facility will give a boost to their business expansion plans.
Source: Businessline
No comments:
Post a Comment