The Goods and Services Tax (GST), introduced by the Government of India on July 1, 2017, is an indirect tax levied on the supply of goods and services.
GST has streamlined the tax landscape by replacing various indirect taxes and consolidating them under one system, simplifying compliance for businesses.
As a landmark structural reform, GST has significantly strengthened the economy by enhancing ease of doing business, boosting productivity and efficiency, and improving tax compliance.
By capturing comprehensive business transactions, GST returns have unlocked new opportunities for lending, particularly for Micro, Small, and Medium Enterprises (MSMEs) and other business entities, facilitating faster and more convenient access to working capital finance from banks and financial institutions.
With over one crore MSMEs registered on the GSTN network, this financing approach is expected to significantly boost the MSME sector, opening new avenues for business growth and expansion.
This innovative method of extending finance to MSMEs has the potential to be transformative, offering a powerful tool for bank personnel to effectively market a large number of accounts under this scheme.
Recognizing the opportunities in this space, the Bank is introducing WBGB GSTNEXT Scheme: Next Generation MSME Loan Leveraging GST Returns
purpose/Objective:
To provide hassle free credit to meet working capital requirements related to business activity or for expansion of business.
Eligibility:
-
Business entities which are individuals, firms, companies, Limited Liability Partnership, co-operative societies, dealing in business activities which are not prohibited by law.
-
GST registered units which have filed GST returns at least for the last six months. Sanctioning Authority needs to ensure online verification of GST returns submitted by the customer for authenticity.
-
The customer account must be KYC complied.
-
Udyam Registration Certificate is mandatory.
-
Entry-level age of the individual applicant / Proprietor: Minimum 21 Years, Maximum 70 Years.
-
Borrowers with a score below the acceptable score, as outlined in the Master Circular on CIRs, are not eligible.
-
In applicable cases, the CIBIL MSME Rank or CRIF Commercial ACE Score must fall within the prescribed threshold, as mentioned in the Master Circular on CIRs.
-
Not applicable to borrowers or units that have shown delinquencies in the past. Specifically, there should be no instances of 60 or more Days Past Due (DPD) in the past 12 months.
-
Credit facilities granted to borrowers or units should not have been classified as NPA in the past 5 years.
ASSESSMENT OF LOAN:
-
A. 25% of the sales reported in the GST returns in the last one year (last 12 months)
-
B. Wherever GST returns have been filed for less than one year, MPBF shall be arrived based on 25% of the annual sales after annualizing GST returns.
COLLATERAL SECURITY:
| Loan Amount |
CIC Score Condition |
Minimum Collateral Security |
Third Party Guarantee |
| Up to Rs. 10 Lakh |
Not Applicable – Irrespective of CIC Score |
NIL |
NIL |
| Above Rs. 10 Lakh Up to Rs. 25 Lakh |
Proprietor/Promoter/ Partners/ Key Person’s CIBIL Score is 750 and above (or equivalent score from any other 3 CICs) |
50% |
NIL |
| Above Rs. 10 Lakh Up to Rs. 25 Lakh |
Proprietor/Promoter/ Partners/ Key Person’s CIBIL Score is less than 750 but within acceptable limit |
75% |
NIL |
| Above Rs. 25 Lakh |
Irrespective of CIC Score |
75% |
25% |
PROCESSING FEE / REVIEW / RENEWAL CHARGES:
| Loan Amount |
Processing Fee |
| Up To Rs. 200.00 Lakh |
0.15% of Loan Amount + GST |
| Above Rs. 200.00 Lakh |
0.30% of Loan Amount + GST |
Documentation Charge:
- Upto Rs 200 Lakh: Rs 50.00 per lakh + GST
- Above Rs 200 Lakh: Rs 100.00 per lakh + GST
PENAL CHARGES:
- Shall be as per Bank’s extant policy on penal charges
PREPAYMENT/FORCLOSURE:
- The loan may be pre-paid / foreclosed at any point of time. No prepayment/foreclosure charges shall be applicable