RBI panel wants govt loan portal to reach out to startups

The Reserve Bank of India constituted the committee,on micro, small and medium enterprises , led by former Securities and Exchange Board of India chief UK Sinha. The committee recommended following: 

  • Government-promoted online loan application platform Psbloansin59minutes should expand coverage and extend loans to startups, an expert committee on micro, small and medium enterprises recommended.
  • The committee recommends that the portal should also cater to new entrepreneurs, including those applying for loans under the Pradhan Mantri Mudra Loan Yojana and Stand-Up India.
  • The committee has suggested the formation of a joint working group of the Indian Banks’ Association and Sidbi to iron out issues pertaining to creation of new MSME lending products and reducing turnaround time during the centralised sanctions stage.
  • The panel also recommended that applications should be disposed of 7-10 days from the time they get in-principle approval from the platform.
  • Further, the panel recommended, the portal should be linked to land records, Central Registry of Securitisation Asset Reconstruction and Security Interest and Credit Guarantee Fund Trust for Micro and Small Enterprises.

                                                            LEARNING WITH TIMES

Psb loans in 59 Minutes,The online platform is a central government initiative that is managed by the Small Industries Development Bank of India (Sidbi),which caters to funding for MSMEs.

The platform permits both private and public sector banks to participate in loan disbursal. While government-owned banks were the first on the platform, Kotak Mahindra Bank was the first private sector lender to join the initiative.

                                    When businesses apply for loans, they are assessed through various sources like GST data, tax filings, bank statement of the proprietors and their businesses. Based on the assessment, they are offered an in principle approval letter, which enables them to get bank credit. 


A company that is in the first stage of its operations; where the entrepreneur moves from the idea stage to securing financing, laying down the basis structure of the business. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small scale operations are not sustainable in the long term without additional funding from venture capitalists.


Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.


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