The Hindu Business Line : SBI's midcorp focus `pays off'

IN July 2004, State Bank of India created a separate set up for focused lending to companies whose turnover falls between Rs 25 crore and Rs 350 crore. Mr V.K. Gupta, Chief General Manager (Mid-Corporates), SBI, has termed the "midcorp experiment'' a success.

At present, SBI's outstanding advances from the midcorps (as defined) are about Rs 48,000 crore, about 25 per cent of the bank's corporate book. Since October, lendings to midcorps have been going up by Rs 1,250 crore a month, Mr Gupta told presspersons here on Friday.

He said that the midcorps' focus was based on a study done by the bank previously, which revealed that all over India, there are 6,100 companies that fall in the Rs 25 crore-Rs 350 crore bracket. Of these, 1,900 are SBI's customers. "Our target is the other 4,200," Mr Gupta said.

Accordingly, the bank has taken four steps. First, it has named `relationships managers' for midcorp companies, whose job is only to liaise with the borrowers. Second, it has created separate cells to deal with loans to these companies. Third, it has empowered managers at these cells with powers to sanction loans up to Rs 50 crore. Finally, it has strengthened credit delivery systems, simplifying transactions.

Earlier, speaking at a meeting on export credit organised by the Federation of Indian Export Organisations, Mr Gupta noted that SBI would be acquiring two banks abroad shortly — one in Asia and another in Africa.

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