Private lender ICICI Bank has introduced a new working capital facility that enables MSMEs (Micro, Small and Medium Enterprise) to get an overdraft (OD) based on the turnover reported in their Good and Services Tax (GST) returns.
This facility ensures to enable improved convenience on availing quick OD facility, by omitting the requirement of paper-intensive assessment of financial documents including balance sheets of previous years. It also simplifies the process for MSMEs by enabling the usage of GST returns for assessing their eligibility of working capital limit and thus ensures the sanctioning of the OD within two working days.
This is in initiated in the wake of the traditional/standard industry practice that requires verification of multiple documents involving several days.
“The Goods & Services Tax (GST) has been a transformational structural reform that has strengthened the economy with the creation of a national market, enhanced ease of doing business, greater productivity & efficiency and improved tax compliance. Since GST takes into account comprehensive business flows, we believe that GST returns will change the lending paradigm for MSMEs with faster and hassle-free access to working capital finance from financial institutions,” said Anup Bagchi, Executive Director, ICICI Bank.
He further added, “In line with this, we are delighted to launch GST backed overdraft facility that enables MSMEs to avail an OD of upto Rs 1 crore based on their GST returns and without any additional assessment of balance sheets. With over one crore MSMEs registered in the GSTN network, we believe that this facility will give a boost to the MSME industry as a whole and open new avenues for business expansion for them. This new proposition resonates our effort in developing path breaking innovations for MSME customers, thereby offering them with solutions that cater to all their business needs.“