A first-of-its-kind product ‘SME Assist’ wherein the Bank will provide a short term Working Capital Demand Loan (WCDL) to Bank’s MSMEs for 9 months. Under ‘SME Assist’ Bank would provide loan to Micro, Small and Medium Entrepreneurs on their Input Credit Claims under GST, at a concessional rate of interest.
Speaking on the occasion, Mr. V.Ramling, CGM (SME), said Bank has been at the forefront in handholding SME sector. This product will help them to manage their working capital requirement till the time they get input credit. It also supports the government’s GST initiative, as it will help stabilize the SMEs to run their operations without any hurdle.
WCDL will be sanctioned outside Assessed Bank Finance (ABF) at 20% of the existing fund based working capital limit or 80% of Input tax claim due on purchases, whichever is lower. With a nominal processing fee of Rs.2000, MSMEs can avail WCDL to meet their working capital requirement. Companies applying for a loan under the product have to provide a certificate from their Chartered Accountant confirming the input credit claims.
Also under SME Assist, SME borrowers can enjoy a moratorium period for the first three months. The ad-hoc amount can be repaid either in one bullet payment or in 6 EMIs in next 6 months after moratorium period is over. Simple documentation is proposed and the SME customers of the Bank can avail SME Assist facility till March 31, 2018.
It also has to be noted that the validity of cheques of former Associate Banks has been extended till 31st December, 2017.