The Hindu Business Line : SBI keen on more mid-corporate accounts

STATE Bank of India, the country's biggest bank, is trying to bring more mid-corporate units under its fold. The Bank currently caters to 2000 mid-corporate units and is gearing up to double this figure shortly.

"This is an area where we know our target. Of course, some companies may be bad assets and we will not be looking at acquiring business from them. The plan is to zero in on the healthy companies in need for funds with our competitive service," said an SBI official.

Currently, mid-corporates contribute around Rs 35,000 crore in terms of advances and Rs 10,000 crore in terms of deposits for SBI. In the month of October alone, the bank saw a significant credit growth in this segment, to the tune of Rs 1,250 crore.

In the next six months, SBI expects this segment to grow by an additional Rs 6,000 crore in terms of advances.

The mid-corporates segment constitutes companies having an annual turnover of between Rs 25 crore and Rs 350 crore.

"On a year-on-year basis, up to October, SBI has recorded a 29 per cent growth in overall credit offtake. This kind of growth may or may not be sustainable in the long term. But as of now there is tremendous potential to be tapped in this segment. With the manufacturing sector buoyant the existing units are thriving," said an official.

"The next six months will be busy season for most businesses, especially sugar mills, rice sellers, the cotton industry etc. These constitute a major part of the mid-corporates segment that is coming to the bank for funds," he said.

In July this year, a pilot project based on recommendations by the bank's consultant McKinsey & Co, a `Mid-Corporate Group' was created under SBI's Corporate Banking Group at the corporate centre.

SBI identified 27 branches spread across 14 centres having a high concentration of mid-corporate units, which have now been directly brought under the control of the mid-corporate set up in the bank.

To begin with, seven mid-corporate regions have been created at Mumbai, Ahmedabad, New Delhi, Kolkata, Hyderabad, Chennai and Bangalore. The bank has also identified mid-corporate accounts at branches in 17 other centres that could be brought under the control of the mid-corporate group.

In all these branches the credit delivery systems are being strengthened so that there is better turnaround time, according to officials.

With the help of the mid-corporate group, the bank will enhance its focus on the mid-corporate business, using relationship management to build volumes in both credit-based and fee-based business.

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