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In a first for a public sector bank, the Syndicate Bank is setting up a platform for loan approvals within 15 minutes. Top officials of the bank said that loans within limits of ₹5 cr for housing, retail and MSME segments can be applied online using the platform and will be in-principal approved within 15 minutes.
“In this quarter, we are planning to launch a system of giving in-principal approval for loans of upto ₹5 cr within 15 minutes for housing, retail and MSME segments. After government's push for 59-minutes loan approval for MSMEs, this will be our first offering by any public sector bank,” Ajay Kumar Khurana, Executive Director, Syndicate Bank, said during a media interaction here.
According to Khurana, there is intense competition in the banking industry and such products will differentiate it with a competitive edge. “The software is being readied and will be launched before the end of this fiscal. This 15-minute loan platform will not be available for agri-loans and corporate loans,” said Khurana.
MUDRA push
In spite of several concerns being raised about the success of MUDRA loans, the bank has set a target to lend ₹10,000 crore to MSMEs during next two months. It has 4.5 lakh MUDRA loan accounts with advances of ₹7,100 cr.
The Gross NPA in these accounts is about 10 per cent. This is, however, lower as compared to the Gross NPA of the bank at 12.98 per cent as on September 2018. Of the total Gross NPAs of ₹27,000 cr, corporate segment share is about ₹14,000 cr.
Recovering bad debt
Khurana stated that so far ₹1000 cr from two large accounts has been recovered following the resolution process under NCLT. However, ₹1,500 cr more is to be recovered from three large accounts including Essar Steel and Bhushan Power.
The bank has recently launched Stressed Assets Management (SAM) vertical with a dedicated team of 1,200 of the bank's employees focussing on recovery of NPAs.
The vertical would comprise of legal and credit experts who would help branch managers with the recovery of dues. The members of SAM have been given training on insolvency and bankruptcy code (IBC) and the functioning of the National Company Law Tribunal (NCLT).
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