ICICI Bank launches lending to MSMEs based on their GST returns

Mumbai: ICICI Bank Ltd announced the launch of 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. Christened ‘GST Business Loan’, the facility is available to any MSME including non-customers of ICICI Bank, upto Rs 1 crore.

This facility brings in the improved convenience of availing quick OD facility, as it does away with the requirement of paper-intensive assessment of financial documents including balance sheets of previous years. This also enhances convenience for MSMEs by enabling the usage of GST returns for assessing their eligibility of working capital limit, thereby simplifying the process for sanction of the OD within two working days. This is in lieu of the traditional/standard industry practice which requires scrutiny into multiple documents that typically takes several days.

Sharing his view on the launch, Mr. Anup Bagchi, Executive Director, ICICI Bank, said, “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.