BoI: loans to pro­fes­sions & self em­ployed in­creas­ing

Banking Frontiers - - Loan Disbursals -


The pro­fes­sion­als & self-em­ployed (PSEs) fi­nanced by BoI in­cludes doc­tors, engi­neers, ar­chi­tects, teach­ers, con­trac­tors, small busi­ness­men, skilled man­power like elec­tri­cian, car­pen­ter, plumber etc. Mo­ha­p­a­tra states: “To­tal num­ber of loans ex­tended to such cus­tomers in Q1, 201718 is 4947, amount­ing `143.68 cr.” Loan out­stand­ing to PSEs has in­creased more than two and half fold in last just 2 years and a quar­ter. Mo­ha­p­a­tra adds: “Loan out­stand­ing to PSEs has in­creased from `2073.03 cr in 2015-16 to `2512.77 cr in 2016-17.”


Self-em­ployed en­gaged in small busi­ness/ traders has been given the high­est credit in Q1 for FY 2017-18.

Mo­ha­p­a­tra states: “Ap­prox­i­mately 1400 ac­counts fall un­der this cat­e­gory, amount­ing `44 cr.”


BoI is of­fer­ing 0.50-1.00% dis­count to fe­male pro­fes­sion­als over ap­pli­ca­ble rate of interest. The ROI ranges from 1 year MCLR to 2.5% over 1 year MCLR de­pend­ing upon the scheme and rat­ing of the bor­rower. BoI has re­cently launched prod­ucts like - star doc­tor plus, star con­trac­tor line of credit etc for fi­nanc­ing to PSEs.


Bank has var­i­ous mon­i­tor­ing tools and tech­niques by which it con­tains slip­pages. In NPA ac­counts, it tries to re­vive the ac­count through rec­ti­fi­ca­tion/re­struc­tur­ing. The de­fault rate in re­pay­ment of loans to PSE is de­creas­ing. Mo­ha­p­a­tra re­veals: “Num­ber of PSE ac­counts that slipped in NPA came down from 4825 (`119.10 cr) as of 2016-17 to 2996 (`47.80 cr) in Q1 2017-18.”


BoI has made PSE loan ap­pli­ca­tions online and the same could be ac­cessed through web­site of the bank. It has ded­i­cated pro­cess­ing cells in var­i­ous zones through which the loans are pro­cessed to make it less cum­ber­some for the bor­rower.


The de­mand of loans to PSEs will be more in metro and tier 1 cities com­pared to other cen­ters. Mo­ha­p­a­tra es­ti­mates: “Presently loan to PSEs are around 5% of the to­tal MSME port­fo­lio of the bank. We wish to in­crease the same to ap­prox­i­mately 8% over the pe­riod of 2-3 years down the line.”

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