Challenges

The SME underwriting process in Federal Bank was manual, wherein branches/relationship managers collect the loan application form, related loan documents, run the bureau checks and login the case in the loan origination system manually, which in turn increased the TAT for sanctioning an SME loan to a prospective customer.

Description of Innovation

Federal Insta loans platform enables SME clients to avail digital in-principle loan sanction up to Rs. 2 crores in less than 30 minutes , after assessing the eligibility of the borrower based on the business rules integrated in the platform. The platform uses sophisticated algorithms to read and analyze data points from various sources such as IT returns, GST data, bank statements, MCA, bureau in less than 30 minutes while capturing the borrower’s basic details using smart analytics. It also analyses Balance sheet/Financial statements from the income tax returns (ITRs) uploaded by the borrower and provides detailed financial analysis required for sanctioning the loan. Borrowers will receive an online in-principle sanction letter after completion of the process. Borrowers can visit their respective Federal Bank branch selected during the journey along with the in-principle sanction letter and complete the remaining loan sanction formalities Federal Insta loans platform enables SME clients to avail digital in-principle loan sanction up to Rs. 2 crores in less than 30 minutes , after assessing the eligibility of the borrower based on the b

Results

The implementation of Federal Insta loans platform played a major role in automating the SME loan underwriting process from the conventional lending model. This platform has become an enabler for our branches/relationship managers to source more quality business proposals and increase the SME loan portfolio in Federal Bank.