Business Daily from THE HINDU group of publications
Saturday, Nov 22, 2008
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Saturday, Nov 22, 2008 ePaper | Mobile/PDA Version | Audio | Blogs |
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Money & Banking
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Private Banks Industry & Economy - SSI
G. Naga Sridhar Hyderabad, Nov. 21 ICICI Bank will be ‘cautious’ in its lending to small and medium enterprises in view of the likely impact of economic slowdown on their business growth. “We are seeing delays in global receivables and shrinking orders in some SMEs. We will be cautious in lending,” Mr Vijay Chandok, Head of SME Business, ICICI Bank, told Business Line here on Friday on the sidelines of `SME CEO Knowledge Series’ organised jointly by ICICI Bank and Cyber Media. Financially sound SMEs are holding back expansion plans involving deployment of new capital and hence the growth funding in the sector could be impacted from the demand side in the industry in general. “In cases where funding is sought from us, we will adopt a case-to-case approach in deciding on the advances as some sectors are relatively immune from the global slowdown,” he added. Internal ratingThe bank has drawn upon the credit surrogates on the basis of which credit scoring models are being used exclusively for the SMEs. “We are not insisting on any external rating. Even they have rating, we will apply our own models,” he said. The bank, which has over three per cent of its total balance sheet size in the SME portfolio at present, would, however, focus on strengthening the existing relationship with over one million SME clients, he said. On the profitability of SME lending, Mr Chandok said, “The return on equity in SME lending is significantly higher as of now and we will continue to focus on the segment which has been growing at 35 per cent for the last three years.” The bank would leverage technology to woo new SME clients. RBI Governor calls for separate code for lending to SMEs Banks now target SMEs for growing asset portfolio More Stories on : Private Banks | SSI | ICICI Bank Ltd
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