New Delhi: State Bank of India has announced that it is focusing on increasing its SME loan book by opening dedicated 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.
Banks have been witnessing rising number of defaults from large corporate, especially from the infra space, as the economy has been moribund for almost three years now, while the system as whole has not been reporting rising defaults from SMEs.
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.
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 close by branches," she said. Net profit inched up 3.33 percent to Rs 3,349 crore in the June quarter from Rs 3,241 crore a year ago, while gross NPAs declined 66 basis points to 4.90%.