At a time when most banks are extremely cautious while lending due to voaltility in both the Indian and overseas markets, Corporation Bank is in the process of launching centralised loan centres that cater to the needs of Small and Medium Enterprises (SME).
Speaking to TNIE recently, Amar Lal Daultani, Executive Director of the bank said, “The economy needs the infusion of funds and small and medium entrepreneurs especially are struggling for want of finance. Unless we strengthen small businesses which operate at the grassroots level, we cannot strengthen the economy.”
Tamil Nadu has the fourth largest number of MSMEs in the country at a whopping 7.6 lakh units, which employ 53 lakh people and hold a consolidated investment of `39, 438 crore, he added.
Daultani felt that Indian businesses have been strong despite credit inadequacy and lack of timely credit delivery. “This is where we aim to make a difference. We will minimise the turn around time (TAT). After making an assessment, we will sanction loans within a maximum of 15 days and a minimum of 10 days,” he stated.
Speaking about the uniqueness of the centralised loan centres, he said that these will offer SMEs a good quality landing. The bank will use due deligence from SMERA, a SEBI registered rating agency for a correct performance profile of an SME.
“Besides lending, we will help entrepreneurs understand the areas in which they need to strengthen their businesses; be it management, marketing or finance. This advisory service is what makes us unique and it will help both the bank and the customer,” he reiterated.
When asked if he expects the SME loan centres to be affected due to the volatility in the the global and local markets, he opined that interest rates will not be affected because domestic currency depends on liquidity available locally, which behaves differently from liquidity in foreign markets.
Corporation Bank, which reported a marginal rise in net profit at `351.2 crore for the quarter ended March 2012, compared with the `345.3 crore earned a year-ago, has launched the loan centres in Mumbai, Delhi, Hyderabad, Pune and Bangalore.
“Since then, we have given away credit worth `300 crore in Mumbai, `135 crore in Pune and `120 crore in Bangalore and about `170 crore in Delhi and Hyderabad. In Chennai, it expected to sanction approximately `180 crore worth loans to SME units on day one, bringing the total credit sanctioned until now to about `900 crore,” Daultani said.