PM Modi benefitting 'friends' with 59-minute loan scheme: Congress

Prime Minister Modi launched a new facility for micro, small and medium enterprises (MSMEs) alongside a slew of measures for the sector, which, Vallabh said, incidentally has been battered for a long term due to demonetisation in November 2016

The Congress Sunday accused Prime Minister Narendra Modi of benefitting "friends" by promoting private and crony capitalists at the expense of public institutions and demanded an independent judicial probe into the new '59-minute loan scheme' for the MSME sector.

Alleging the scheme is a "scam", Congress leader Gaurav Vallabh demanded that the affairs of portal www.psbloansin59minutes.com, processing loans to small industries, be fully investigated and its contract with the government cancelled. There was no immediate response from either the government or the PMO or the ruling BJP over the charges made by the Congress. Prime Minister Modi launched a new facility for micro, small and medium enterprises (MSMEs) alongside a slew of measures for the sector, which, Vallabh said, incidentally has been battered for a long term due to demonetisation in November 2016.

He said a platform to facilitate quick loans was launched on November 2, 2018 with "pomp and promotion show typical in nature of various types of propaganda of this government". The Congress leader alleged that the web portal is supported by public sector institutions such as SIDBI and PSU banks as partners, even though it is owned by Ahmedabad-based private company CapitaWorld Platform Pvt Ltd. He alleged that the company is charging Rs 1,000 and another Rs 180 as GST from each small industry registered on its website and so far lakhs of entities have been "cheated" by it.

Based on the euphoric response, if 1 million MSMEs apply for the same, the said company stands to gain Rs 100 crore for lead generation, he said and asked, "Should a government scheme be allowed to enrich private parties?" "The Congress party demands that the agreement with a private party (CapitaWorld) to 'loot' MSME sector should be cancelled with immediate effect and an enquiry on the role of Prime Minister's Office and Finance Minister in this 'massive financial fraud' should be initiated by an independent judicial body," Vallabh told reporters.

"To benefit his 'friends', Prime Minister Modi has given a contract to manage the 'www.psbloansin59minutes.com' to Ahmedabad-based CapitaWorld private limited and the company was incorporated on March 30, 2015 and as per financial year 2017 its income is Rs 15,000 odd without any operations till then," he said. He also alleged that its chief executive officer has been a part of Modi's poll campaign in 2014 general elections, who has now been "benefitted" in this form.

The Congress leader said the company was valued at Rs 19.216 crore pre-investment as of April 2018 and based on this valuation nine entities, including SIDBI, Bank of Baroda and SBI, invested Rs 22 crore into this company for 54 pc shareholding and its post-investment valuation is Rs 41 crore. "Why is the work of bankers being used for enriching private individuals while the nature of the work is not complex and banks have been doing the same earlier also? Vallabh said the RBI has raised red flags on bad loans, cyber security and bank frauds and such "euphoric schemes" initiated by the government is fraught with very high risks.

SIDBI has, however, claimed that CapitaWorld ¿ the company behind the 'loan in 59 minutes' portal launched by Modi last week ¿ is a public-sector firm. Public sector unit (PSU) institutions have an option to increase stake from 56 pc to 74 pc in the future. "A consortium of six public banks led by SIDBI held 56 pc in the fintech company Capita World which gave it a public sector character," the SIDBI tweeted.

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