ICICI Bank is going to facilitate the Micro, Small & Medium Enterprises by offering them a Loan facility up to One crore rupees which will be based on their GST returns. The one availing this loan is not supposed to submit several other Financial statements like the previous years’ balance sheet, the document of collateral, FD etc. The Bank would rely on the details enlisted in the GST returns for the details of the customers.
The motive behind shortening the process of Loan sanction is reducing the paperwork and cutting the lead time between the application and sanction of the loan. This will be offered in the form of overdraft facility and within a shorter period of time, i.e.within two working days which is really quicker as compared to the document verification process, where it takes days.
The businessmen who are not a regular customer of ICICI bank could also take the benefit of this offer.
For a loan sanction, the customer is supposed to submit the GST return for the past six months. This will be considered as the eligibility of the working capital limit. The businessman need not submit any document of collateral or any other security like FD as a mortgage for this loan facility. The overdraft amount would be calculated based on the turnover mentioned in the GST returns. The loan limit will be 20 percent of the turnover as mentioned on the GST returns.
A survey conducted by ICICI bank reveals that as compared to last year’s 22 percent, this year only 11 percent of the businesses believe that the launch of GST will be proved to be a loss and will have a negative impact on their turnover.
Mr. Anup Bagchi the Executive Director of ICICI Bank stated that this move taken by the Bank is to benefit the business class, especially the small and the medium class businessmen, to get started with their new businesses without any hassle and hindrance.
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This could be done only by reducing the paperwork and making access to the loans available for a shorter period of time. This step taken by the ICICI bank is a clever and positive move towards strengthening its business loan book basis the GST returns that are providing the details of a reliable company’s Financial position.
Moreover, the interest rates on these loans are not specified on the official website of the bank. But the interest rates would be decided bases borrower’s profile, his financial position and the repayment track record of the past.
