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'ICICI' launch new working capital facility
Press Release
Tuesday, September 11 | 04:56 PM
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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, Anup Bagchi, Executive Director, ICICI Bank, said, “The 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.

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.“

As per our bank’s internal customer survey, 90 percent of the respondents have reported a positive impact of the new tax regime on increase in digitization, simplification of tax process and transparency in transactions. This is a notable testimony of the industry moving forward in an encouraging manner post the introduction of GST. The study also witnessed a significant drop in the number of customers anticipating a negative impact of GST on their turnover in the current financial year, with the percentage dropping steeply to 11 percent from the 22 percent that was reported in the last financial year.
 
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