The Hindu Business Line : BoB cuts interest rates on SME loans

For fund-based limits of Rs 2 lakh but less than Rs 25 lakh for maturity up to one year, the bank has announced reduction by 200 basis points to 10.5 per cent. For loans above one year, the reduction would be of 225 basis points at 11 per cent.

Informing this at a press briefing here on Saturday, the Chairman and Managing Director, Dr A.K. Khandelwal, said the new rates would come into effect from December 1.

"The liberal policies adopted by our board of directors today is in response to the Government's desire that banks should step up credit to SMEs in a big way," Mr Khandelwal said.

He said that in respect of accounts with fund-based limits of over Rs 25 lakh, the interest rate would be reduced by 100 basis points to 10.5 per cent in all slabs.

The bank has also decided to introduce an SME Gold Card for units with credit rating of `AA' and above. The quantum of loans would be 10 per cent of the assessed maximum permissible bank finance and for a period of 12 months. The pricing of the loans will be as per credit rating and as applicable to working capital limits.

BoB would also announce a composite line of credit to SME sector for meeting working capital as well as capital expenditure related to business of the borrower.

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