The Hindu Business Line : Now, most banks focus on SMEs

With the Government and the Reserve Bank of India urging banks to step up lending to this sector, most banks are offering dedicated services and products to this segment. Bankers say the segment is likely to see a growth of over 30 per cent this fiscal.

Mr Sameer Bhatia, Country Head, Corporate Banking, HDFC Bank, said, "We have a special focussed group for the SME segment as it is one of our prime focus areas."

The bank classifies all companies with a turnover of up to Rs 200 crore as SME and this segment currently forms 20 per cent of the bank's total corporate portfolio. The growth in this segment has been about 50 per cent and the bank hopes to maintain the same rate this fiscal, Mr Bhatia said.

ICICI Bank's SME portfolio includes any business with a turnover of Rs 250 crore or net worth of Rs 75 crore. The business in this segment has more than doubled in the last three years, said Mr Vijay Chandok, General Manager, ICICI Bank.

The overall SME segment could see a rise of around 40 per cent, Mr Chandok said.

A senior official from Bank of India said, "SME is a focused area and is driving the current account portfolio of the bank. This segment will grow and form the bank's bread and butter."

The bank has an SME portfolio of about Rs 7,500-8,000 crore and it plans to increase it by Rs 3,000 crore this year, which is about a 30-per cent growth. It is less than 20 per cent of total advances, the official said.

The small scale and medium enterprises portfolio of Union Bank of India is around Rs 6,400 crore out of total advances of around Rs 47,400 crore, as on September 30, said a senior official from the bank. While the growth in the segment has been 10-15 per cent, the bank is stepping it up this year to 20 per cent, the official said.

HDFC Bank and ICICI Bank offer corporate credit cards and advisory services for their SME clients. Bank of India offers specialised current accounts with additional facilities such as free ATM-cum-debit card, instant credit of outstation cheques of up to Rs 1 lakh and a cheque bounce protection facility of up to Rs 50,000.

Bank of Baroda recently reduced rates on loans for medium enterprises by 200 basis points for limits from Rs 2 lakh to Rs 25 lakh and by 100 basis points for limits over Rs 25 lakh. The bank also plans to set up Project Consultancy Service Cells for SMEs at six select centres across the country.

Development Credit Bank launched `Easy Business', which offers the SME and the small business segments speedy loan sanction in three working days except weekends or else a refund of 50 per cent of the processing fee to the customer.

Union Bank of India plans to set up specialised desks for SME units at regional offices so that the processing time for the loans will be faster. The bank also plans to offer value-added products such as multi-city cheques and cash management for its SME clients, the official said.

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