The State Bank of India (SBI) has focused on increasing its SME footprint in the country. The leading PSU bank will open dedicated SME branches across the country. “Earlier, we had sourcing teams and branches for SMEs, and sanction was done after being appraised by the SME city credit cell, that is a factory concept. But we have found that there is a lack of ownership in such a business model, so, we are now getting dedicated SME branches that will only do SME advances,” SBI Chairperson Arundhati Bhattacharya told PTI in an interview recently.
Smt Bhattacharya said under the new model, the people who source the loans will not only appraise them, but will also be responsible for post sanction monitoring. “So, they will be responsible end-to-end,” she added.
State Bank of India is a pioneer in SME financing in India. The Bank has developed a wide array of products and services in order to cater to the evolving needs of the SME sector. It has over 1.3 million SME loan accounts with total exposure of Rs 1.63 lakh crore as on March 2012.
Apart from a wide network of branches across the country, 579 specialized SME branches across the country have been kept under special focus to develop an effective platform for SME lending. Single point contact through dedicated relationship managers have been put in place for medium as well as small enterprises. Centralized Processing Cells have been created for quick turnaround time in sanction & disbursal for loans up to Rs 1 crore.
The quality control of the loan given to the SMEs will be done by the SME credit cell.
Besides, the bank has also formed an off-site inspection team, which will do an online audit of the sanctions on an almost realtime basis so as to ensure that the loan is not manipulated, Bhattacharya added.
“The sanction terms and the proposals will be uploaded and off-site inspection team will audit it and will come back if they see any lacunae in that,” the chairman said.
Under the new model, the bank will not open new SME-focused branches but will convert few of its branches into pure SME branches. “Certain branches will be converted so that they become pure SME branches and other jobs that were being done there, those will get migrated to closeby branches,” she said.
The bank has already done pilot projects in Mumbai and Delhi and will soon roll out in other parts.
For inclusive growth, the SBI has a special scheme called ‘SME Collateral Free Loan’ for Micro & Small Enterprises segment for lending under CGTMSE guarantee coverage with liberalized terms up to a credit limit of Rs 1.00 crore.
The Bank has adopted Cluster approach as a strategy to improve the credit flow to SME sector through industrial and artisan clusters across the country. It seeks to extend techno-managerial assistance and counseling support to SMEs through Consultancy Services Cell and Project Uptech. This initiative facilitates technology up-gradation in Industrial Clusters. The bank promotes entrepreneurship through Entrepreneurship Development Programme (EDPs) under tie-up with Entrepreneurship Development Institutes.