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Signs agreement with SIDBI

SMALL IS BEAUTIFUL: Mr M. V. Nair (left), CMD, Union Bank of India, and Mr N. Balasubramanian, CMD, SIDBI, at a press conference in Mumbai on Thursday. - Paul Noronha

Mumbai , June 22

Union Bank of India is targeting a 25 per cent growth in its Small and Medium Enterprises portfolio.

The bank hopes to increase its total exposure to the SME sector to 20 per cent from 12.5 per cent in three years, said Mr M.V. Nair, Chairman and Managing Director, Union Bank of India.

The bank's SME portfolio in 2005-06 was Rs 6,830 crore and its target in 2006-07 is Rs 8,540 crore, Mr Nair said.

Union Bank signed an agreement with the Small Industries Development Bank of India (SIDBI) to jointly lend to SMEs. Union Bank is also converting 32 small-scale industries branches to SME branches.

It will identify 50 more branches in major centres for accelerated credit to the SME sector. The bank's specially formed SME cell will ensure reduced turnaround time for disbursals to this sector.

The bank is also planning to enter into agreements with State Finance Corporations for increased lending to SMEs

Union Bank and SIDBI are also in the process of putting up marketing teams in 15 centres for identifying and appraising viable SME units and lending to them, Mr Nair said.

This is the 14th bank that SIDBI has tied up with, said Mr N. Balasubramanian, Chairman and Managing Director, SIDBI. Other initiatives lined up include setting up IT parks for small and medium IT and IT supply companies jointly with some State governments. These parks will be around 100-200 acres.

The first park is being developed in Bangalore. Similar parks will be developed in Hyderabad and Chennai within two years," Mr Balasubramanian said.

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