The Government-e-Marketplace (GeM) has signed a Memorandum of Understanding (MoU) with Federal Bank on Wednesday to offer a number of services aimed towards creating a convenient and transparent payment ecosystem.
The MoU was signed by S. Suresh Kumar, Additional CEO, GeM and R. Vardharajan, Country Head – Government Business, Federal Bank along with Deepesh Gehlot, Director (GeM) and Hemant Mahindru, State Business Head – Government Business, Federal Bank in the presence of Talleen Kumar, CEO, GeM.
The MoU is expected to enable transfer of funds through GeM Pool Accounts (GPA), advising of Performance Bank Guarantees (e-PBG) and Earnest Money Deposit (EMD) to the registered users on the portal.
According to GeM, the MoU will facilitate a cashless, paperless and transparent payment system on the portal and would create an efficient procurement system for government entities.
At present, GeM is working in coordination with Trade Receivables Discounting System (TReDs), and Small Industries Development Bank of India (SIDBI) to offer bill discounting and financing of working capital where the cost of capital is linked to the performance and rating of a seller on GeM.
GeM states that this will help the sellers and the Micro Small and Medium Enterprises (MSMEs) in particular to access easy credit and do better business with the government.
In addition, GeM is contemplating the creation of EMD pool account for making it convenient for sellers to follow the criteria laid down by EMD while responding to bids.