State Bank of India (SBI) offers an essential financial service known as the Electronic Dealer Financing Scheme (EDFS), more commonly known as SBI EDFS or even EDFS SBI. This innovative cash credit scheme helps authorised dealers of major corporations meet their short-term capital requirements for procuring inventory.
In this post, we will look at the scheme in some detail, explore the things you need to know about it, including its features, eligibility criteria and learn how to access it online.
Section 1: SBI EDFS Scheme Features
Cash Credit Scheme
SBI EDFS is a cash credit scheme designed to assist authorised dealers in meeting their short-term capital requirements for inventory procurement.
Determining the Sanctioned Amount
The amount sanctioned under EDFS is determined based on factors such as the dealer’s needs, projected sales, past performance, and the limit recommended by the corporate. The sanctioned amount is the lowest of the three.
Stakeholders in the Scheme
The EDFS scheme involves multiple stakeholders, including corporates, dealers, distributors and banks.
Interest rates for EDFS are based on the 1-year Marginal Cost of Funds Based Lending Rate (MCLR).
Margin and Collateral Requirements
There is no margin charged on this scheme. The entire amount of finance is given to the dealer. However, it should be kept in mind that the collateral requirements for EDFS SBI can vary from Nil (or no collateral) to a maximum of 50% of the sanctioned amount.
The processing fee for EDFS may range from ₹10,000 to ₹30,000.
The maximum tenure of the credit under SBI EDFS is 90 days. This is subject to yearly renewal.
- Transactions under the EDFS scheme must be carried out on the bank’s Internet banking portal, which means no chequebook is needed. The online system further makes it an easy, convenient and hassle-free process for everyone
- The bank offers multiple channel repayment options such as cash, cheque, fund transfer, NEFT, RTGS, etc.
- There are two transaction methods: the Pull Method (initiated by the larger industrial company) and the Push Model (initiated by the dealer for remittances)
Section 2: Eligibility for SBI EDFS
Only authorised dealers of industry majors with tie-up arrangements with SBI are eligible to participate in the EDFS scheme.
Section 3: Accessing SBI EDFS Online
To access SBI EDFS online, authorised dealers can visit the State Bank’s online portal and follow the login procedure.