SBI Planning To Extend The MSME 59-Minute Loan Scheme To Car Loans
State Bank of India Ltd. Chairman Rajnish Kumar on Monday said that small business owners are not enthused with the MSME 59-minute loan scheme launched by the government late last year.
But despite the tepid response, SBI is planning to extend the scheme to auto buyers, especially car loans, the bank’s chairman said.
According to Kumar, a businessman having turnover of up to Rs 25 crore can get an in-principle approval for a loan of up to Rs 5 crore within 59-minutes under the scheme launched by Prime Minister Narendra Modi in November.
“The platform should have been very successful, but I think the awareness about it is yet to reach the targeted audience, that is MSMEs,” Kumar said at the FIBAC annual banking conference.
According to him, up to 90 percent of MSMEs, seen as the backbone of the Indian economy, can get loans under the 59-minute scheme. “It can become a very powerful platform, the only thing is lack of awareness,” he said.
The SBI chairman said the algorithm analyses inputs such as Goods and Services Tax payments, income tax payments and cash-flow statements while making a decision on the amount of loans a borrower is eligible for.
Kumar said the bank is also planning to extend the MSME loan scheme to car and auto loans because all the loans in this category are in the same quantum. He said he has given instructions that no one will be held accountable for decisions taken by the algorithm, adding that the bank staff should be responsible only for post-sanction monitoring, documentation and disbursals.
According to a recent media report, since the launch of the 59-minute MSME loan scheme by public sector banks, 50,706 loan proposals were given in-principle approvals of which 27,893 loans were sanctioned, as of March 31.