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India-SMEs seek loan restructuring

indiamoneyWith the slowdown taking its toll and people losing jobs, more and more requests for restructuring of loans are coming the banks’ way.

“Home loans and SME (small and medium enterprise) loans are coming up most for restructuring. Some real estate developers too are making requests,” says Albert Tauro, CMD of Vijaya Bank.


SMEs too have been badly hit by the slowing economy. Many have not been receiving payments on time from their customers, many others — especially exporters and auto ancillaries — have seen sales slump, forcing them to default on loans. Tauro says a short period loan repayment moratorium is being considered for deserving SMEs.

SBI estimates to restructure about 50,000 accounts for SMEs. Some banking officials expect one to two lakh SME accounts will be restructured.

Muralidhar, president, Federation of Karnataka Chambers of Commerce & Industry (FKCCI), says some members have applied for restructuring, and some have already received a fresh package. “But we have been getting complaints from the districts that bank branches are not taking enough interest,” he says.

Even in Bangalore, not everybody is happy with the banks’ approach. J R Bangera, promoter of Premier Starch Products, says he had asked for an additional loan limit because his customer payments had been delayed, and his tax payments were falling due.

“But the bank has only granted an ad hoc limit for 15 days. So I’ll have to go to the bank again soon. So much time is spent sitting in front of bank managers. The top brass in banks may have the right approach, but down the line, the managers don’t understand the trouble we are in,” he says.

source-Times of India