Government e-Market (GeM), a public procurement portal, has signed a memorandum of understanding (MoU) with two public sector banks - Indian Bank and Canara Bank - to offer payment-related services.
The banks will offer an array of services including transfer of funds through GeM pool accounts (GPA), advising on performance bank guarantees (e-PBG), earnest money deposit (EMD) and payment gateway to the registered users on the portal, according to the ministry of commerce and industry.
The MoU was signed in the presence of Talleen Kumar, CEO, GeM with representatives from Indian Bank and Canara Bank.
GeM is a paperless, cashless and system- driven e-marketplace that enables procurement of common use goods and services with minimal human interface. It is a one-stop platform for facilitating online procurement of goods and services required by various government departments, organisations and PSUs.
GeM is also working with Banks, Trade Receivables Discounting System (TReDs) and Small Industries Development Bank of India (SIDBI) to provide bill discounting and financing of working capital where the cost of capital is linked to the performance and rating of a seller on GeM.
TReDs is a digital platform initiated by the Reserve Bank of India for facilitating micro, small and medium enterprises (MSMEs) by financing their trade receivables.
This will help sellers and MSMEs to access easy credit and do better business with the government. In addition, GeM is contemplating the creation of an EMD pool account for making it easy for sellers to comply with the EMD requirements while responding to bids.
Online integration for payments and various banking services is one of the priorities for GeM. GeM has already signed MoUs with 18 scheduled commercial public sector and private banks.