ALSO READMinimum balance requirement: SBI reviewing penalty for savings accounts After SBI, 4 other govt banks asked to weigh acquisition of smaller peers Govt looks to create 3-4 SBI-sized banks as it mulls PSB consolidation After merger of 5 associates with SBI, Govt keen to consolidate more PSBs Arun Jaitley introduces bill to repeal SBI Subsidiary Banks Act
The State Bank of India on Thursday said it has launched a new product to provide a short-term working capital demand loan to its MSME clients. The new initiative, called SME Assist, would offer loans to MSME customers on the basis of their input credit claims under Goods and Services Tax (GST). The loans will be offered at a concessional rate of interest, the bank said in a statement. "This product will help them to manage their working capital requirement till the time they get input credit. It will also help stabilise the SMEs to run their operations without any hurdle," the bank's Chief General Manager (SME), V Ramling, said in the statement here today. The loan will be sanctioned outside Assessed Bank Finance (ABF) at 20 per cent of the existing fund-based working capital limit or 80 per cent of input tax claim due on purchases, whichever is lower. The loan processing fee under the scheme is Rs 2,000.
The companies applying for a loan under the product have to provide a certificate from their chartered accountant confirming the input credit claims. Under the scheme, the SME borrowers would have a moratorium period for the first three months, the bank said. The ad-hoc amount can be repaid either in one bullet payment or in six EMIs in next six months after the moratorium period is over. The SME customers of the bank can avail loan under the facility till March 31, 2018.