The largest public sector bank, State Bank of India (SBI) has decided to increase lending to small and medium enterprises (SME) in the northern region, which face tough time in raising money due to global economic slowdown.
The bank, which has one-lakh borrowers in its portfolio from SME sector from the northern region, has set an ambitious target of disbursing loan of Rs 3,000 crore in the financial year 2008-09.
Talking to media persons on Thursday, Ajay Swaroop, chief general manager, Chandigarh circle of the bank, ? SBI is not facing any liquidity crunch and is in a comfortable position to lend more to SME sector, which is facing extreme pressure due to cancellation of export orders, delayed realisation of payments and non availability of foreign credit due to global meltdown. Besides the industrial units are getting affected by piling up of inventories, falling prices, drying up of liquidity and increasing interest rates. We have recently conducted seminars for SME customers in Chandigarh and Ludhiana to understand their problems. We have elicited various suggestions and the bank is mulling over how to help them. The bank will extend its support to all those having genuine problems?.
The bank has already taken several steps to mitigate the hardships of SME sector like relaxation of norms for margin, extending the cover period for inventories, additional need-based finance and rescheduling of installments. However, the NPA in SME category stands at 2.5% in this region, Swaroop informed .
Responding to a query, Ajay Swaroop said bank was not shying away from lending in home loan and auto loan category.
The exposure of SBI to SME sector in Chandigarh circle, which includes Punjab, Haryana, Himachal Pradesh and Jammu and Kashmir has grown by Rs 1,066 crore till October in the current year registering 20% growth than the increase during the same period last year.
The bank?s total advances to SME sector in Chandigarh circle stand at Rs 12,000 crore. Apart from this circle, deposits have grown by Rs 5,626 crore. To strengthen its base in the region, the bank which has a network of 753 branches will add another 145 branches.