Bank of Baroda (BoB) plans to roll out specialised branches in each district of the country to cater to the credit requirements of micro and small enterprises (MSE) under the Pradhan Mantri Mudra Yojana and Stand Up India schemes.

At present, the public sector bank is conducting a pilot in each branch at its 13 zones. If the pilot is successful, one branch in each district will be turned into a hub for exclusively processing MSE loan applications up to ₹25 lakh from other branches (spokes) within the district.

“In the case of Mudra loans, to ensure faster service and quality, we have started centralised processing at the district level. So, a pilot is going on in our 13 zones. So, instead of each and every branch doing the same business, we are centralising Mudra and Stand Up India businesses in a specialised branch in each district.

“If the pilot is successful, we will roll this out pan-India,” said Kiran Pal Singh, Head, MSME Relationships and Government Schemes. Under the Pradhan Mantri Mudra Yojana, a loan of up to ₹50,000 is given under the sub-scheme ‘Shishu’; between ₹50,000 to ₹5 lakh under ‘Kishore’; and between ₹5 lakh to ₹10 lakh under ‘Tarun’. Loans taken do not require collaterals.

The Stand Up India scheme facilitates bank loans between ₹10 lakh and ₹1 crore to at least one Scheduled Caste/ Scheduled Tribe borrower, and at least one woman borrower per bank branch for setting up greenfield enterprises. Singh said that up to December-end 2018, BoB achieved 64 per cent of the government-set target of disbursing Mudra loans aggregating ₹5,850 crore in FY2019. “Last year, our target (for Mudra loans) was ₹4,200 crore, but our achievement was ₹5,305 crore...We will surpass this year’s target also,” he added.

The bank is scrubbing its database of current account customerswho are registered on the Goods and Services Tax Network but not are availing facilities commensurate with their turnover.

“Now we come to know about customers’ turnover from GST portal. So, we reach out to them via SMS and call centres...From walk-in business, our bank has shifted focus to targeted business. If customer selection is right, delinquency will be low,” explained Singh.

CV financing

To grow its MSME business, BoB introduced the commercial vehicle (CV) financing business, targeting strategic customers, having a fleet size of 25 and above, in July 2018.

“We started cash-flow-based CV lending business in July. We have also started retail CV business. The market size is ₹1.5 lakh crore. This year (FY2019) we are targeting ₹1,000-crore CV financing business,” said Singh.

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