GST to fast-track lending to SMEs, says SBI

Vijay C Roy

Tribune News Service

Chandigarh, December 7

With the GST rollout, lending to SMEs is likely to become simpler, faster and hassle-free, said SBI Managing Director (Retail & Digital Banking) PK Gupta here today.

He said: “With data of SMEs becoming easily available, banks will be able to make a better assessment of their funding requirements and cash flow situation before lending to them.”

At present, the lending to SMEs is mainly based on collaterals. At times, assessment of assets to ascertain cash flow can be misleading.

On credit growth, he said retail credit offtake had been encouraging as compared to corporate lending because of stressed conditions. “We are bullish on the retail segment as it is growing at around 14-15%. Overall, we anticipate a growth of 6%,” he said. In the current fiscal, the bank expects retail loans will grow by around 16-18%.

He said digital transactions had increased significantly after demonetisation and they were taking the digital route for customer interface and back-end processes to improve cost efficiency.

“Our branches handle 22% of transactions while the rest are carried out by digital means such as internet banking, mobile banking, ATMs, etc. The share of digital banking has risen above ATMs. Digital banking rose to 36% of total transactions during the year as against 26% in the previous year whereas the share of ATMs fell to 28% as compared to 43% a year ago,” he said.

On stressed assets, he said the bank had initiated proceedings against defaulters by moving to National Company Law Tribunal (NCLT) to recover their dues. On being asked whether NCLT can be approached for all NPA cases, he said, “The banks should use the best available mechanism to recover bad loans and the NCLT route cannot be used effectively in all the cases. Besides the NCLT, there are a lot of other mechanisms like RBI scheme which can be used to recover the bad loans. We advise our bankers to use the best available mechanisms.”

On customer services, Gupta said, “We have launched various initiatives including innovative products to improve customers’ service and bank’s cost efficiency.”