SBI managing director and group head (national banking) SR Iyer said: "Corporate loans are meant to augment long-term working-capital requirement of companies. This will be an additional channel, offered along with the usual credit facility."

The loan cost will be marginally higher than that of working-capital loans and will carry one per cent higher interest rate, Iyer said. "We will evaluate future cash flows of a company before disbursing the loan," he said.

The bank expects the product to go a long way in enabling corporates to meet the vagaries of the ongoing economic recession. From SBI's point of view, the product will give it an advantage as the bank will not be required to reschedule loans any more.

"For corporates, it will be easier to access this product thanfloating non-convertible debentures (NCDs) as they are required to fulfil so many formalities to place NCDs," said Iyer.

Against the backdrop of economic downturn, the bank is revising the target of bringing down non-performing assets (NPAs.) "I think the earlier target of 5 per cent can only be achieved by the end of 2001," said Iyer. SBI plans to bring down its net NPA level to 6.5 per cent by the end of current fiscal.

As a part of its business strategy, the bank is planning to push rural development which has a potential to generate more credit demands. The plan is to help 8,000 self-help groups during the current fiscal.

Reorienting its focus on agriculture banking, the bank plans to increase disbursals to the agricultural sector. "The bank is targeting to disburse more than Rs 3,500 crore for development of agricultural sector and small-scale industry in 1998-99," said Iyer.

The discretionary powers of sanctioning authorities of the bank at various levels have been enhanced up to a maximum of400 per cent to increase the flow of credit to small-scale industries. This is done with a view to dispose at least 80-90 per cent of SSI loan proposals at the branch level.

"The branches have been instructed to extend working capital as well as term loans to SSIs," Iyer said.

It has plans to distribute 20 lakh kisan credit cards, of which five lakh will be distributed during the current fiscal.

Another focus area will be personal loans. SBI plans to disburse Rs 2,000 crore as personal loans, of which Rs 1,000 crore will be exclusively distributed through the bank's 460 housing-finance branches.

Speaking about the quarterly credit offtake till June 30, Iyer said that the slight improvement in disbursals in June will either keep the growth rate same as in the corresponding period of the last year or the overall growth might fall marginally. "There has been a 2 per cent deposit growth during the first quarter," Iyer said.