YES Bank to Offer Loans to MSMEs Based on their GST Returns Data

With a view to help small businesses to avail secured loans, private sector lender YES Bank has launched a credit product called YES GST to provide loans to MSMEs on the basis of their Good and Services Tax (GST) returns.

YES GST is an overdraft (OD) facility for micro, small and medium enterprises (MSMEs), through which small entrepreneurs can avail ODs up to Rs 1 crore based on their annual turnover and GST returns.

The bank is targeting a loan amount of Rs 1,000 crore through YES GST in the fiscal year 2018-19.

However, the bank’s overall exposure to MSMEs as on March 31, 2018, has crossed ₹32,500 crore.

Rajan Pental, Group President and Head of Branch and Retail Banking told the Press that the Product is committed to provide faster and hassle-free access to working capital finance to these small businesses.

With an average ticket size of Rs 40-50 lakh, the product will disburse Rs 1000 crore depending on the size and scale of business.

Over documentation, Pental said that to avail the benefits of this product no additional assessment of balance sheet or bank statement will be required.

The MSMEs can avail this OD facility even with zero balance against mortgage of residential or commercial property.

The MSMEs can use this sanctioned amount either fully or in tranches, he added.

In addition to this, the loan assessment would be done on the basis of last six months of GST returns and after the consent of customer the further process of documentation will be conducted.

With all procedures done, the loan can be processed within a day.

YES Bank had launched ‘YES GST program’ last year to help MSMEs understand the impact of the changes and prepare them for migration to the new GST system.