Bipin Saraf, Group Executive and Head Bharat Banking at Axis Bank, shares how secured overdrafts are reshaping small business financing
As access to timely working capital remains a critical challenge for India’s Micro, Small, and Medium Enterprises, banks are increasingly recalibrating credit strategies to balance speed, risk management, and borrower flexibility. Within this evolving landscape, Axis Bank has introduced a secured overdraft facility for MSMEs that enables businesses to unlock liquidity against gold assets while maintaining operational continuity.
The gold backed overdraft facility is available to individual entrepreneurs and sole proprietors, including both existing and new to bank customers. It is operational across more than 3,300 Axis Bank branches enabled for gold lending, offering widespread access to credit for small businesses across urban and semi urban markets.
Eligible borrowers can access same day over the counter disbursement, with funds credited directly to their bank accounts. Loan amounts range from ₹50,000 to ₹1 crore, subject to eligibility criteria and internal policies. Structured as an overdraft, the facility requires borrowers to service only monthly interest, allowing greater flexibility in managing cash flows during business cycles.
The documentation process has been kept limited, with requirements restricted to KYC, Udyam Registration or Assist Certificate, and either income tax returns or GST registration. Loans are extended against gold jewellery, enabling faster credit access without reliance on unsecured borrowing or lengthy approval processes.
A defining feature of the facility is a loan to value of up to 82 percent, which is higher than standard market offerings while remaining aligned with regulatory norms. According to the bank, this higher eligibility is supported by disciplined underwriting practices, robust risk management frameworks, and stringent gold valuation and collateral monitoring systems. These controls are intended to ensure portfolio quality while expanding credit availability.
Commenting on the approach to MSME lending, Bipin Saraf, Group Executive and Head Bharat Banking at Axis Bank, said, “Small businesses are central to India’s economic momentum, yet timely access to working capital remains a persistent challenge. By combining secured lending with speed and flexibility, we are enabling MSMEs to meet their business needs without disruption. Our focus remains on extending credit within prudent limits while maintaining strong risk governance.”
The offering aligns with broader trends in India’s credit ecosystem, where secured lending and MSME financing are emerging as key growth drivers. Rising gold prices, alongside the need for short tenure and predictable working capital solutions, have increased the relevance of collateral backed credit for small businesses seeking liquidity without long term balance sheet strain.
Through this initiative, Axis Bank aims to strengthen its MSME portfolio by offering credit solutions that respond to changing business needs while aligning with evolving credit market dynamics.
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