GeM partners with UCO Bank, BoM for payment-related services
The Government e-Marketplace has signed the two agreements to offer services like transfer of funds through GeM pool accounts and earnest money deposits to the portal's registered users.
The Government e-Marketplace (GeM) has signed two agreements with Bank of Maharashtra and UCO Bank to offer services like transfer of funds through GeM pool accounts and earnest money deposit (EMD) to registered users on the portal.
The pact also covers advising of performance bank guarantees (e-PBG).
The MoUs were signed on December 16, according to an official statement.
"Integration for payments and various banking services is one of the priorities for GeM towards the cherished goal of a paperless, contactless, and cashless system. GeM has already signed MoUs with 19 public sector and private banks to enable these functionalities," the Commerce and Industry Ministry said in the statement.
It further stated the GeM is working with banks, TReDs, and SIDBI to provide bill discounting and financing of working capital, with the cost of capital linked to the performance and rating of a seller on the marketplace.
"This will help the sellers in general and the MSMEs in particular to access easy credit and do better business with the government. In addition, GeM is contemplating the creation of EMD pool account for making it easy for sellers to comply with the EMD requirements while responding to bids," the statement said.
GeM SPV is the national public procurement portal for ensuring efficient and transparent mechanisms for procurement of goods and services by central and state government organisations.
It is an initiative of the Centre that offers a one-stop inclusive platform for facilitating online procurement. GeM provides tools for direct purchase, bidding, and reverse auction for ensuring transparent and efficient procurement.
Earlier in November, a senior official with the platform had mentioned GeM was working on a framework for ensuring payment to sellers within a guaranteed timeframe.
"We are working on a proposal wherein we will have a regime by which sellers would get payments in a specified time," said Talleen Kumar, CEO of GeM.
GeM is also looking at ways through which banks can lend to sellers. "Through this process, banks can provide working capital for MSMEs. We can give transaction data to banks, and based on transaction history of a seller and looking at their performance and rating, banks can lend. This kind of facility is possible on GeM," he added.
Currently, MSMEs face problems in getting credit. For this, the platform is working on robust online seller and buyer rating mechanisms that will help sellers avail working capital loans where the cost of capital is linked to the performance and rating of sellers.
This will also help buyers to procure from highly-rated sellers in critical areas of procurement, he said.
(Disclaimer: Additional background information has been added to this PTI copy for context)
(Edited by Athirupa Geetha Manichandar)
