The State Bank of India has sent notices to several Snapdeal sellers to immediately pay up their dues.
The bank has asked the sellers to resolve the issue by immediate repayment of outstanding loans above their drawing power.
“We continue to have exposure to Snapdeal’s capital assist platform. We allocate certain limits to a seller based on his past six months’ sales. Then we keep on reviewing the performance of these traders every month and some of them have seen a drop in sales, so we have asked them to pay up. These sellers can avail more loans provided they register satisfactory sales on the platform.”
Reacting to the situation, many vendors have cut down or stopped sales on Snapdeal and just a few members have received notices from SBI and Axis Bank asking for repayment, according to online seller associations.
We work on the basis of a formula -if a seller does x number of sales every month, we may give them x+1 or x+2 loans,If their sales drop to x-10 or x-30 then naturally their drawing power comes down automatically .If the outstanding is more than their drawing power, then we will ask them to pay up. And suppose next month the seller performs well, their drawing power is restored again.”
Kansal added that the bank had not witnessed any trouble with sellers of other ecommerce companies it banks with.
Snapdeal said that nonperforming asset (NPA) levels on the Capital Assist programme “continue to be sub 1%,” while adding thattotal disbursals through it stood at about $100 million through more than 25 financial institutions.
“As a routine exercise, banks review the credit limits assigned to borrowers and do not reflect the company’s standing in any manner whatsoever. We work closely with merchants in identifying and facilitating their funding needs by connecting them to the relevant bank NBFC,As such, merchant credit limits get assigned by the partner after tak ing into cognizance various vari ables including a merchant’s sales history on Snapdeal and overall cashflow,”
a Snapdeal representative said.