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SBI to mitigate norms to lend SMEs

With an aim to extend support to the troubled SMEs of north India, including states like Punjab and Haryana, in view of the global financial turbulence, PSU lender SBI is relaxing its lending norms.

The Chandigarh circle of SBI, catering to Punjab, Haryana, Chandigarh, Himachal Pradesh and Jammu & Kashmir states, is aiming to lend Rs 3,000 crore with a growth of 35 per cent to the SME sector in 2008-09. “We are taking several steps to mitigate the hardships faced by vulnerable SME sector on account of economic depression,” SBI, chief general manager, Ajay Swaroop said here today.

The bank has decided to offer relaxation in norms for margin, extending cover period of inventories, rescheduling of instalments and grant of ad hoc limits for short term. The main thrust of the bank in respect of lending would be towards pharmaceuticals, steel, auto components, real estate, timber, engineering goods, hand tool etc, he said.
Yesterday, State Bank of Patiala also announced the launch of SME Bonanza scheme, whereby it would offer 0.5 per cent concession in interest rate to SME borrower for one year and would not charge processing, upfront and mortgage fee from borrowers.

In order to ascertain the problems being faced by SMEs, the SBI held a talk with them and elicited suggestions as to how the bank could help them out, he said. Stating that SBI has scaled up lending to SMEs, he said that the exposure of the bank to SMEs in Chandigarh circle grew by Rs 1,066 crore till October this year, which is almost 20 per cent more than the growth during same period.

The bank’s exposure to SME constitutes 50 per cent of total advances and its total lending to SME stood at Rs 12,000 crore in this region. With an eye on 35 per cent growth in each segment, the bank plans to expand in north by opening 140 branches this year. Presently, it has 753 branches in Punjab, Haryana, Chandigarh, Himachal Pradesh and Jammu & Kashmir.

*source-Sakaal Times – Pune,India