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Tuesday, Jun 18, 2002

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SBI lines up credit schemes for small biz

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Mr C. Sundarashyam, Chief General Manager, SBI, Kerala Circle.

KOCHI, June 17

STATE Bank of India (SBI) will be launching small business credit card and tailor-made home loans in the State where the demand for housing loans is on the increase.

Speaking to newspersons, Mr C. Sundarashyam, Chief General Manager, Kerala Circle, said that the bank has designed a novel product for providing hassle-free credit facilities to small borrowers with credit limit up to Rs 5 lakh.

Small-scale industrial units including tiny units, small retail traders, professional and self-employed and small business units are eligible for the issue of credit cards under the scheme, he added.

Simplified application forms and credit scoring model for small business credit cards have been designed to enable officials to quickly process applications.

This scheme, which is expected to be launched within 10 days, will enable borrowers to avail of the credit limit with minimum paperwork.

SBI has also launched a new home loan product called `tailor-made home loans', which would give the borrowers the flexibility of structuring their equated monthly instalments (EMIs). Mr Sundarashyam said that the bank was the first in the country to offer tailor-made EMIs, which would be based on the servicing ability of the borrower.

"For instance, the EMI could be higher for the initial few years and subsequently come down. The borrower can also resort to balloon repayment during times of high income like receipt of bonus, insurance maturity amount, etc. To top it all, the scheme will not attract any higher interest rate or fees.''

He added that the bank, which has 229 branches spread over 14 districts, has plans to open more branches in the Malappuram, Wayanad and Kasaragod districts where its presence is minimal. However, this would be done depending upon viability.

Besides, SBI proposes to open two personal banking branches at Thrissur and Ernakulam before December, apart from relocating a few branches for convenience of the customers.

Mr Sundarashyam said that the bank was aiming at mobilising aggregate deposits of Rs 1,175 crore and has set advances target of Rs 496 crore during the current fiscal in Kerala.

"As of now, the bank has Rs 5,798 crore in deposits and Rs 2,473 crore in advances. Besides, we have invested an additional Rs 739 crore in various securities floated by the Kerala Government and other Government undertakings operating in the State. The credit plus investment to deposit ratio stand at 55 per cent," he said.

SBI would like to finance infrastructure projects too, he added.

Given the growing demand for housing loans, SBI has set a budget of Rs 200 crore for this segment. It is holding discussions with the State Government for extending housing finance to its employees.

Already, Rs 10 crore had been advanced to the police housing society, Mr Sundarashyam said.

The bank has also extended housing finance to employees of South Malabar Gramin Bank, while negotiations are under way with North Malabar Gramin Bank for a similar scheme.

For the agriculture sector, Rs 75 crore has been budgeted. SBI is also targeting issue of 35,000 kisan credit cards, apart from 5,000 kisan gold credit cards, which would facilitate agriculturists with multi-purpose loans.

It will associate with the vegetable and fruit promotion council of Kerala to promote horticulture through self-help groups. Under this scheme, 1,000 such groups would be given assistance this year.

Another thrust area is education, for which Rs 20 crore has been set apart. The budget for the commercial and institutional segments would be Rs 66 crore, while small-scale industries will get Rs 40 crore and small business, Rs 30 crore, during the current fiscal.

During the years, SBI also plans to computerise 25 more branches. An ATM would be set up at the Thiruvananthapuram railway station before the end of the month, he said.

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