‘PSB Portal’ is a micro-service digital platform which primarily connects funding needs of Micro, Small and Medium Enterprises (MSMEs) to Banks for business. It is a strategic initiative of SIBDI with five other Public Sector Banks and was launched by Government of India, in November 2018, to provide loans to MSMEs of up to Rs.1 crore. The main motive of this initiative is to ease the process of fund availability to MSMEs and decrease the turnaround time of credit delivery to MSME sector. The new ‘PSB portal’ also makes it possible to provide timely finance at reasonable and competitive rates of interest to MSME sector. MSME sector forms a vital component of the economy in terms of their contribution to employment generation, exports and inclusive growth. One-third of the country's GDP is contributed by more than 50 million MSMEs in India. Thus, the role of MSMEs in the economic and social development of the country is not to be over-looked. There is need for finance that meets the life-cycle needs of MSMEs with a strong oversight mechanism in Banks to see that MSME-related lending policies are implemented at the operating level, is high. Such measures by the Government would serve the purpose of ease of access to funding requirements of MSME’s and also help open new avenues for Banks to increase their business while tapping new customers thereby increasing their priority sector assets. It will make formal banking more inclusive and deepen the roots of financial inclusion via digitization in the economy. After almost after a year of this initiative, on September 5 2019, Retail products (Home Loan Personal Loan and Auto Loan) were also added to the portal to increase the ease of credit to retail customers to further facilitate purchasing power in the economy. This paper will analyse the challenges faced by the Bankers while financing MSMEs via PSB portal and the reasons for rejection of the applications with further prospects of the scheme.