The Hindu Business Line : SBI joins race to tap mid-corporates

PRIVATE banks and foreign banks have a new competitor to contend with - a new look SBI with a mid-corporate focus. Started about 9 months ago in Mumbai on a pilot basis, the mid-corporate group of SBI has since had a national rollout and is presently operational out of 27 branches across the country.

The idea behind starting the mid-corporate group (MCG) was to focus on companies with a turnover of between Rs 25 crore and Rs 350 crore. This was seen as a potential market where the bank could make some money while also commanding loyal customers.

The top-end firms serviced by the corporate accounts group (CAG) were in any case limiting their borrowing or doing so at extremely low rates.

The MCG has managed to add about 632 new clients since its inception in July 2004. These units belong to various sectors such as steel, cement, construction, tourism, healthcare, pharma, etc. and have borrowed a little over Rs 9,400 crore during the last 9 months.

Senior SBI officials said that the mid-corporate group presently controls advances of about Rs 53,000 crore which is the largest business group in the bank.

A relationship manager would manage each mid-corporate account. Centralised credit processing cells have been set up to ensure quicker processing of proposals. Enhanced powers have been given to mid-corporate credit committees headed by a general manager.

These committees would be able to sanction proposals of up to Rs 50 crore (of which Rs 25 crore would be fund-based).

SBI officials said the loan target for the group for this fiscal was Rs 12,000 crore.

Other public sector banks are also zeroing in on this segment now.

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