Sensing the demand for loans with minimum documentation, Bank of Maharashtra has introduced a trade finance product for traders and micro, small and medium enterprises.
By doing so, the public sector bank is trying to attract co-operative bank customers into its fold. Traders and MSME promoters prefer going to small banks as they offer hassle-free loans.
Mr C.V. R. Rajendran, Executive Director, Bank of Maharashtra, said traders and MSMEs can get loans up to Rs 5 crore from the bank if they offer collateral which is 140 per cent of the loan amount. “It is not a real-estate loan. We just take the property from a loan seeker as collateral,” he said.
The new loan product is a property-based loan. The loans are given after verifying the balance-sheet of the companies. Due to the security of the property, the bank charges lower interest — 14.5 per cent, against the normal interest of 16.5 per cent.