YES Bank, a leading private sector bank and finance organization in India, has announced a new credit product called YES GST through which the bank will offer easy loans to small businesses on the basis of their goods and services tax (GST) returns and compliance report. The overdraft (OD) product is a kind of loan program launched specifically for micro, small and medium enterprise (MSME) businesses in the country.
Referred to as a one-of-its-kind product, YES GST will allow small businesses to avail an OD of up to 1 crore rupees, depending on their annual turnover and GST returns. The bank has proposed a target to disburse loans worth INR 1,000 crore through this program during the ongoing financial year. As per reports, YES bank’s overall lending exposure to MSMEs is over INR 32,500 crore, as on 31st March 2018.
Rajan Pental, Group President and Head of Branch and Retail Banking, YES Bank, said in a statement, “MSMEs are the backbone of our economy. We are committed to supporting MSMEs in their growth story. Through this product, we hope to provide faster and hassle-free access to working capital finance to these small businesses. We will be disbursing ₹1,000 crore with an average ticket size of ₹40-50 lakh depending on the size of the business.”
What Documents are Required to Avail the Loan?
The best thing about YES GST is that loans will be solely processed based on your GST history and returns. That means no assessment of balance sheet, credits, bank statements, and other 40-60 documents like before. It will also reduce the time of processing and it is being estimated that the loans will be granted in as soon as one day.
The OD will be given only to MSMEs against mortgage of their existing commercial or residential properties. The assessment for loan grant would be done on the basis of the GST returns of the last six months of the concerned party. The business can choose to utilize the loan amount either in partial or in full. The required documents, including GST return details, will be collected upon acquiring the customer’s consent.
Read Also: Impact of Goods and Services Tax on SMEs, MSME and Startups
The new ‘YES GST’ OD product has been introduced under the YES GST programme which was launched last year to help small businesses understand the implementation of the GST and migrate effectively to the new tax system. Through this program, the bank has conducted several workshops and availed loans to thousands of businesses helping them grow in the post-GST era.
