State Bank of Patiala (SBOP) on Wednesday said it is eyeing 20 per cent growth in its total business, with a focus on retail, MSME sectors and has planned to open 60 new branches in current fiscal.

“We are expecting 20 per cent growth in our total business in this fiscal,” SBOP Managing Director A K Gupta told reporters here on the sidelines of CII conference on Micro, Small and Medium Enterprises (MSME).

Stating that the bank has been growing at 20 per cent for the last three years, the bank clocked total business of Rs 1.43 lakh crore comprising Rs 79,000 crore of deposits and achieved a profit of Rs 800 crore as on March 31, 2012.

Acknowledging that the credit offtake by corporate sector is not encouraging so far, he said bank’s focus will be on retail lending, financing to MSME and education loans for the current financial year.

To increase its presence, bank has also planned to open 60 new branches in this fiscal and maximum concentration of these branches will be in northern region.

“We will open 60 new branches by the end of this fiscal,” he said. At present, the subsidiary of State Bank of India has 1,065 total branches with maximum presence in Punjab, Haryana, Himachal Pradesh, Chandigarh and Delhi, though it has branches in 20 states.

Asked about financing to MSME sector, Gupta said the bank has an exposure of Rs 10,000 crore towards MSME and plans to raise it by Rs 2,000 crore in 2012-13.

“We have recently reduced the rate of interest for MSME by 2 per cent and it is now available at 10.75 to 12 per cent as per rating of the unit. Moreover, bank has decided to bear the guarantee and annual fee in case of Credit Guarantee Fund Scheme for collateral free financing upto Rs 50 lakh to MSME to encourage small and medium units to get more finance,” he said.

The Patiala-based state-owned bank has sizeable lending exposure to rice milling, cotton ginning and food processing sectors in the northern region.

Asked about the MSME sector complaining of not getting adequate financing from banks, the SBOP MD attributed it to lack of credit information about MSME.

“Credit information about MSME is not easily available and also we do not get track record of (performance of) MSME.

These are the areas where we find difficulty. There are also doubts about professional governance and succession plans of the units,” Gupta said.

Though he said the recovery in MSME is normal, yet the bank is seeing some stress because of poor economic conditions.

(This article was published on September 12, 2012)
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