The Hindu Business Line : Repco Bank sets up NBFC arm for funding small units

Chennai June 18 Even as it is awaiting Government of India's nod for converting into a commercial bank, Repco Bank has set up a NBFC subsidiary exclusively for SME financing.

Repco Bank, originally set up to help repatriates (not refugees!) from Myanmar and Sri Lanka, is today a multi-state co-operative bank.

In January 2006, the Finance Minister, Mr P. Chidambaram, said in a public meeting that the Government would provide re-capitalisation to the bank to raise its networth so that it could become a commercial bank.

Under Ministry lens

As a commercial bank it would be able to offer checking facilities and a full range of retail and corporate products across the country. It is learnt that the proposal is currently under the examination of the Home Ministry.

Only last week, Repco Bank set up Repco MSME Development and Finance Ltd with a paid-up capital of Rs 10 crore, Repco Bank's Managing Director, Mr M. Balasubramanian, told Business Line today.

Small Industries Development Corporation of India (SIDBI) has given a soft-loan of Rs 3 crore, convertible to equity at a later date.

In 2006-07, Repco Bank's total business was about Rs 2,200 crore, with deposits of Rs 1,200 crore and advances of Rs 1,000 crore. It made an operating profit of Rs 29 crore and a net profit of Rs 6.68 crore. It has 45 branches.

MoU with Exim Bank

Meanwhile, the bank has entered into a memorandum of understanding with the Exim Bank of India for providing micro credit. One of Exim Bank's activities is to take products made in the cottage industries of rural India, mainly handicrafts, to overseas markets. Under the MoU, Repco Bank would provide micro finance to the village artisans.

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