Wait No More: Finance Ministry Asks Public Sector Banks To Fastrack  59-Minute Loans To MSMEsRepresentative image. (Pradeep Gaur/Mint via Getty Images)

The Union finance ministry is said to have directed public sector banks to fastrack the issue of 59-minute loans to small businesses and decrease the time taken between preliminary approval and final loan sanction, reports Times Of India (TOI).

PM Modi-led government launched the new scheme that allowed medium, small and micro enterprises (MSMEs) to avail loans of upto Rs one crores from PSBs in under 59 minutes. In just two months after the launch, over 1.12 lakh MSME loan applications of Rs 37,412 crores were approved by the banks.

However, only 60 per cent of all the loan applications has been granted final approval. Also, there are differences in the sanctioning to loan approval ratio among the PSBs. While the ratio for State Bank of India stands at 13.33 per cent, it is 8.6 per cent for Punjab National Bank. However, Bank of Baroda’s ratio stands at 77 per cent.

On the other hand, bankers have expressed a note of caution. “While basic documents are available, banks do undertake due diligence since everyone is answerable in case something goes wrong. The exercise requires things like the cash flow statement. Often the loan applicant takes time to furnish papers," TOI quoted a banking source.

More relief for MSMEs

The GST Council under the chairmanship of Union finance minister Arun Jaitley, on 10 December, decided to double the GST exemption limit over annual turnover from Rs 20 lakh to Rs 40 lakh.

The Council increased the current turnover limit to Rs 1.5 crore from Rs 1 crore in the Composition Scheme. The Scheme has also been opened for service providers.

Also Read: A Lesser Known Impact: Credit Flow To Micro, Small Enterprises Saw Fivefold Increase After GST, Claims Report

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