Contactless banking to be the new paradigm: Fin Services Secretary Rajiv Kumar

"We have started this web portal www.psbloansin59minutes.com for MSME borrowers but going forward more loan products would be onboarded on the portal. It may include personal loan, home loan etc," Financial Services Secretary Rajiv Kumar told PTI.

Based on the experience of this automated loan processing system, other products could be onboarded, he said, adding "contactless banking is going to be the new paradigm as it fosters transparency".

Speaking about the new portal launched by Finance Minister Arun Jaitley last week, Kumar said it will help improve credit flow to the MSME sector which is the backbone of the country's economy in terms of output, exports and employment generation.

This system will stabilise and lay the foundation of a paradigm shift in the way banking is done in the next 6-7 months, he said.

Going forward, he said, linking of data will cut down lapses and information asymmetry. Once data points are connected, it will end the era of giving false information like different income statement to banks and tax authorities. "MSMEs are vital for India's economic ascension. Several initiatives including customised products and strategies as per their needs and automated loan processing have been introduced to achieve faster turnaround and accelerate MSMEs' growth," he said.

Easy availability of credit will also foster India's entrepreneurial spirit, he added.

Highlighting the key features of the portal, he said it has set a new benchmark in loan delivery mechanism by reducing the turnaround time from 20-25 days to just 59 minutes.

Subsequent to this in-principle approval, the loan will be disbursed in 7-8 working days.

"It is one of its kind platform in MSME segment which integrates advanced fintech to ensure seamless loan approval and management. The loans are undertaken without human intervention till disbursement stage.

"A user friendly platform has been built where the MSME borrower is not required to submit any physical document for in-principle approval. The solution uses sophisticated algorithms to read and analyse data points from various sources such as IT returns, GST data, bank statements, MCA21 etc in less than an hour while capturing the applicants' basic details using smart analytics from available documents," he said.

The portal is a strategic initiative of a SIBDI-led consortium of banks -- SBI, Bank of Baroda, PNB, Vijaya Bank and Indian Bank -- incubated under the aegis of the Department of Financial Services, Ministry of Finance.