State of Bank of India on Thursday inked two MoUs — one with e-commerce major Snapdeal and the other with digital payments company, PayPal.
The MoU with Snapdeal is for seller financing schemes under the e-commerce major’s Capital Assist Program.
In the case of PayPal, the partnership will promote cross-border trade and payments helping especially the small and medium enterprises.
SBI has an MSME loan book of approximately Rs.170,000 crore as on December 31, 2014.
Under the financing scheme, the bank will provide loans to small and medium enterprises at easier interest rates. Data on sellers’ credit worthiness will be provided by Snapdeal. Snapdeal, currently, has 150,000 sellers on its platform.
According to Arundhati Bhattacharya, Chairman, SBI, the seller financing scheme will help MSMEs — traders, sellers and manufacturers — to scale up their operations by catering to their working capital requirements. “Rates of interest will be determined by the credit worthiness of the seller,” Bhattacharya said after signing the MoU with Snapdeal. A special concession of 0.25 per cent will be provided to women.
Earlier in the day, SBI entered into a strategic partnership with PayPal where the payment gateway service will be extended to SBI and PayPal users in India as well as abroad. This will be SBI’s first such tie-up for remittance and payments.
According to B Sriram, Managing Director and Group Executive (National Banking), SBI, is also looking to extend the services for domestic transactions.
“Currently, the tie-up will be for cross-border remittances and payments. We are looking to explore the domestic payments space too in the coming days,” he said after signing an MoU with PayPal.
He, however, did not give details of how volumes for such cross border transactions will be impacted following this tie-up with PayPal.
According to Sriram, the bank plans to explore the e-visa, e-governance and remittances for Clean Ganga Campaign segments with this tie-up with PayPal.
PayPal operates in 203 countries and handles nearly 11.5 million transactions a day.