PSB loans are an initiative of the Department of Financial Services, Government of India. It is targeted at Micro, Small, and Medium Enterprises (MSMEs). In 2018, Prime Minister Narendra Modi announced this scheme. Officially titled “PSB loans in 59 minutes”, under this initiative, the intent is to obtain a business loan quickly.
A portal is launched in this regard where business owners can apply for a loan. With interest rates as low as 8.5%, it is a convenient time for businesses to use business loans to expand their businesses with little overheads. Offered by PSBs (Public and Private Sector Banks), NBFCs (Non-Banking Financial Institutions) like LendingKart can participate in the lending process as well.
Why PSB loans are a vital catalyst for growing the MSME sector
In an online marketplace, with many banks and NBFCs offering business loans, MSMEs have a plethora of choices to apply for a business loan. Most MSME applicants are self-employed owners or group of owners. Micro industries have smaller ownership levels and small business footprints. Micro industries especially find it difficult to expand because traditionally, banks did not have specific policies for these businesses.
But with this initiative, even micro enterprises can look to expand, and do it fast. Instead of queuing up at banks and being delayed on account of the long loan approval process, businesses can get a loan approval in less than an hour and even have the money disbursed to their current accounts. Reducing a process that used to take 30 days or more to providing loan in 59 minutes is a revolutionary approach towards business lending.
How does the business loan application and approval process happen?
It is a multi-step transparent process:
- The business must furnish their GST identification number.
- They must upload their income tax returns in XML format.
- The business must provide bank statement of last six months in PDF format.
- The business will have to furnish details of owners, directors, educational details of founders etc.
- An in-principal loan approval process is made in 59 minutes.
- Once loan approval is granted, the borrower can choose their lender.
All types of business loans are covered including working capital loan, mudra loan and term loan.
The following are some other details of this process.
|Rate of interest||Starts from 8.5%|
|With/without collateral loan amount||Rs. 1 lakh to Rs. 5 crores|
|Eligibility check||Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) integration enables eligibility check.|
|Mudra loan||Range from Rs. 10,000 – Rs. 10,00,000|
- The business must be registered with GST. A GST identification number is to be furnished. To register multiple businesses, provide their individual GSTINs.
- Last one year’s ITR statement in XML format is required.
- Total revenue and income details are to be provided for loan eligibility computation.
- Ongoing credit facilities if taken need to be disclosed.
- Any information on a non-GST business needs to be provided.
- E-KYC documents of the applicant or co-applicants need to be uploaded.
- Details of loan required needs to be stated.
How to register for PSB loans
|Step 1||Visit psbloansin59minutes.com and click Register|
|Step 2||Fill in name, address, email, mobile no and click to get OTP.|
|Step 3||Enter the OTP received.|
|Step 4||Select Checkbox to agree to the Terms and Conditions.|
|Step 5||After entering all details, click on Proceed.|
|Step 6||Create a password for the registered account for future access.|
Features of PSB loans in 59 minutes
- Backed by tech – The analysis of loan applications is completely automated. There is no human intervention.
- Minimal documentation – The number of documents required is very less compared to traditional way of documentation sought for such loans.
- Data security – The data of MSMEs and loan applicants is protected by way of strong encryption.
- Integration with government entities – The loan disbursal system is integrated with GST and IT department. Data from these departments is used to determine loan eligibility.
- Multiple lenders – Applicants can make loan applications at multiple banks.
- What is a PSB loan?
PSB Loans in 59 minutes is an online portal or marketplace. The government of India allows banks and NBFCs to provide business loan products for MSME on this portal. Business owners can apply for a loan through this portal. The loan approval process takes less than an hour.
- Is this portal solely for business loans?
You can also apply for personal loans and home loans. The interest rates of the loans is calculated based on criteria such as repayment history, monthly income, credit history etc. of the applicant.
- What is the minimum amount of loan and maximum amount that can be taken?
Minimum amount of loan that can be taken is Rs. 1 lakh and the maximum is Rs. 5 crore.
- What is the base rate of interest for all loans from the PSB loans in 59 minutes portal?
The minimum interest rate starts from 8.5% for all loans. The maximum interest rate is not known. It can vary depending on the profile of the business.
- Are business loans and MSME loans the same?
MSME loans are provided to business that fall under the Micro, Small, Medium Enterprises category. These loans are targeted at business owners looking to expand their businesses. Business loans can also be given to larger businesses. But this portal is primarily focused on MSME.
- Is there a requirement to provide collateral?
There is no requirement to provide collateral to obtain an MSME business loan. However, for larger business loans, there could be a need to provide collateral.
- Within how many days will the loan amount be disbursed?
While loan approval takes less than an hour, the loan disbursal process takes about a week. This is a huge improvement considering that traditionally loan approvals took a month, and loan disbursals took another. In PSB loans in 59 minutes scheme, loan is granted upfront and not in a phased manner.
- Is there a registration fee?
There is no registration fee to apply for PSB loans in 59 minutes. It is free for anyone to join.