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.
According to GK Kansal, Chief General Manager- Small and Medium Enterprises, SBI, the evaluation of loans given by Snapdeal’s Capital Assist programme is done on the basis of seller sales.
Commenting on the development, Kansal said, “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.”
Since a bank witnessed the decrease in the sales, they have asked the sellers to return the loan taken from bank. He further stated that Snapdeal is the only ecommerce firm with whom they have witnessed any trouble with sellers.
Prior to this, in March 2017, Axis Bank had also issued notices to Snapdeal sellers seeking immediate repayment of outstanding loans.
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.
Earlier in 2017, sellers went to Nirmala Sitharaman, Minister of State (Independent Charge) for Ministry of Commerce & Industry to appeal to her to safeguard their money that Snapdeal holds, in the form of outstanding dues. In answer to this, in March 2017, the Minister had stated that she is going to inquire about vendors’ complaints of default payments by the ecommerce unicorn.
Prior to this, in February 2017, Snapdeal had eliminated about 600 people of workforce. There were also rumours of an Alibaba acquisition as well as Softbank writing off around $475 Mn in its combined shareholding value in portfolio companies Ola and Snapdeal, for the period ending December 31, 2016.
(This development was reported by ET)