Credit and Finance for MSMEs: India’s largest private lender HDFC Bank on Monday launched an overdraft facility for small retailers in partnership with the government’s e-governance services delivery arm CSC SPV that enables government schemes and services through common service centres (CSCs). The ‘Dukandar Overdraft Scheme’ by HDFC Bank is aimed at helping shopkeepers and merchants ease their cash crunch. According to the bank, retailers operating for a minimum of three years are eligible for the scheme by providing six months bank statement from any bank. HDFC Bank will approve an overdraft limit from a minimum of Rs 50,000 to a maximum of Rs 10 lakhs based on the statements. Importantly, HDFC Bank won’t seek collateral security, business financials, and income tax returns from retailers who apply for the scheme.
“The new scheme has been created keeping in mind the current situation of small traders. The upper limit for shops operational for less than 6 years is Rs 7.5 lakhs and Rs 10 lakh for establishments which have been in business for more than 6 years,” HDFC Bank said in a statement. The scheme offers a commission of 0.40 per cent to 0.80 per cent for loan amounts of Rs 5 Lakhs and above for village level entrepreneurs (VLE) along with over 600 branches and virtual relationship management support.
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“The prevailing conditions have been particularly harsh on small businesses. HDFC Bank together with CSC has launched this initiative to sustain these small retailers, to help motivate them and create better business opportunities. We at HDFC Bank are trying to create supportive schemes to help businesses get back on their feet before the start of the festive season,” said Smita Bhagat, Country Head – Government and Institutional Business, HDFC Bank in a statement. Dinesh Tyagi, Managing Director at CSC SPV said that the scheme is a practical offering, especially during these difficult and uncertain times for small shopkeepers and businesses and our VLEs alike.
HDFC Bank, as part of the member lending institutions of the Emergency Credit Line Guarantee Scheme (ECLGS), had disbursed around Rs 23,000 crore as of December 31, 2020. “HDFC Bank ranks amongst top banks in terms of extension of credit under the ECLGS scheme which stood at around Rs. 23,000 crore as of December 31, 2020,” the bank had said in a statement. According to a PTI report, HDFC Bank’s Aditya Puri was the highest-grossing banker among the top three private-sector lenders in his retirement year (FY21) with total emoluments of Rs 13.82 crore.