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The 59-minute scheme (or scam?)

Remember Maggi? Why was it called 2-minute noodles when you could never make it in 2 minutes?

On 2 November, Narendra Modi unleashed a Diwali gift to the MSME sector: a business loan of 1 crore to be processed in just 59 minutes, with little documentation. This was touted as a transformative step in money lending, and perhaps rightly so.


Here are some details. The loan would range between Rs 10 lakh and Rs 100 lakh. The interest rate begins at 8 per cent and is dependent on the borrower’s credit rating. The loan will be disbursed within 8 days. There is no collateral as the portal is directly linked to the Credit Guarantee Fund Trust. While there are no registration fees, the borrower has to pay Rs. 1000 plus taxes on the application. Also, he has to pay 0.35 per cent of the advance as processing fees.
MSMEs can apply for loans from SIDBI and five PSU Banks­–SBI, Bank of Baroda, Punjab National Bank, Vijaya Bank and Indian Bank.. The portal will use “sophisticated algorithms,” to process data points from various sources such as IT tax returns, GST details, bank statements, etc. Income or revenue, repayment ability, existing credit facilities details of which will be provided by Commercial Bureau and other factors designed by the lenders are the requirements to avail the loan.
The documents to be submitted are: Annual Reports and Income Tax returns for the last three years, details of bank transactions, Sanction Letter Copy of loans availed earlier, projected financials, Net Worth statements of Directors or Partners or Proprietor, plus a host of other documents.


Earlier SIDBI issued the tender looking for a consultant to establish the organisation for executing the lending
process. While highlighting the eligibility, tender stipulated that the consultant should have been in India since 1 April, 2012 and his income from management consultancy during the last three years should be at least Rs 50 crore. The tender also articulated that the new entity will be a corp rate entity with SIDBI and other five public sector banks as shareholders will be established once a consultant was selected.
However, the reality is different. The portal discloses the fact that the website is not the property of a new independent legal entity and is operated by a fin-tech corporate organisation called CapitaWorld Platform which has failed to meet the prerequisites of the tender.
The Ahmedabad CapitaWorld was established in 2015, had no income for March 2016, suffered a revenue loss of Rs. 38,888 in 2017 and enjoyed an income of Rs.15,680 in 2018. The shares of the company were valued at Rs.100 (face value of Rs.10) in 2017 and Rs.129.39 in 2018 by a firm of chartered accountants. Several banks bought the shares at that premium. Vinod Shah and Vikas Shah are the signatories and the other Director is Vinod Modha, tactical advisor for Nirma and Mudra, which were managed by Anil Ambani. Recently Akhil Handa, who led Modi’s 2014 crusade was coopted in the Board.
If these raise the needle of suspicion, more to follow. Shockingly the application form requires borrowers provide login credentials including the password for income tax website, Goods and Service Tax Identification Number, user name and password of GST. As if this is not sufficient, the applicant is requested to provide bank statements of the past six months in PDF format or provide ‘login ID and password’ of the bank account. Without submitting these details, one cannot proceed.

Rs 100 crore in a day!

Undoubtedly, CapitaWorld will earn a lot of money from this assignment. In addition to loan approval fees, it also gets 0.35% of the loan disbursements. As per the statistical information of the website Rs.23,582 crore loan has been approved considering 1.69 lakh registrations the day after big the announcement. By a simple calculation, 0.35% of loan amount works out to Rs 82.53 crore. And the application fee translated to Rs 16.90 crore. That’s a cozy approximate Rs 100 crore with more to follow.
By the way, the email id of CapitaWorld is ‘’

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