The Department of Financial Services in the Ministry of Finance is pushing public sector banks (PSBs) to enhance their procurement through the Government e-Marketplace (GeM) portal to Rs 10,000 crore in FY24, as it saves cost and brings transparency in the procurement procedure, a senior official said.
“Beginning next financial year, PSBs would be more actively engaged on the platform and are expected to reach about Rs 10,000 crore for FY24. The target for the current financial year is Rs 6,000 crore and they are on track to achieve it. The PSBs have procured Rs 5,000 crore worth of Gross Merchandise Value from the portal,” he added.
Canara Bank and Punjab National Bank are leading performers among PSBs in procurement through the GeM portal.
Banks generally procure stationery items, transportation services, cleaning services, ATM maintenance, security services, automation services, among other things via GeM.
GeM is an online platform for public procurement in India, launched in 2016 by the Ministry of Commerce and Industry. Its objective is to create an inclusive, efficient, and transparent platform for buyers and sellers to carry out procurement activities in a fair and competitive manner.
Anil Bhardwaj, secretary general, Federation of Indian Micro and Small & Medium Enterprises (FISME), said banks consume a great deal of stationery, and Micro and Small Enterprises (MSEs) have a huge presence in that sector.
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A senior banking official said PSBs give priority to GeM for their procurement, but many automation, software, and IT-related products needed for functioning in corporate offices do not meet their requirements on the portal.
The official quoted first said the GeM Sahay facility will now be available to all sellers--earlier it was available for only sole proprietorship firms. This will enable sellers to get loans at the point of acceptance of an order at competitive interest rates and help them with the working capital required to complete the order.
“Private sector banks are more interested in providing short-term loans to sellers based on their past fulfilment of orders on the portal,” he added.
GeM was integrated with SAHAY to launch the GeM-SAHAY app last May, to address the credit availability challenges faced by sole proprietors on GeM.
GeM Sahay provides an end-to-end digital solution that grants collateral-free loans instantly and without requiring the consent of any buyers.
The GeM portal is expected to almost double its gross merchandise value (GMV) to Rs 2 trillion in FY23, and has already surpassed the Rs 1.5 trillion mark early this month.
Bhardwaj said PSBs have fared better than central public sector undertakings (CPSEs) in settling payments, but their procurement from MSMEs is less than 25 per cent, though they aren't mandated under the public procurement policy.