As part of its strategy to scale up credit off-take to small and medium enterprises (SMEs), public sector lender UCO Bank on Tuesday said it would open five exclusive SME loan hubs this year with an annual business target of Rs 500 crore each from them.
“We will open five SME Loan Hubs in this year alone in Hyderabad, Ahemdabad, Jaipur, Raipur and Nagpur... each hub will garner a business of Rs 500 crore,” UCO Bank Executive Director Ajai Kumar told reporters on Tuesday on the sidelines of opening of new SME Loan Hub here.
Currently, UCO bank has SME loan hubs in Kolkata, Mumbai, Chennai, Chandigarh, Delhi and Bangalore. “In next phase, we will open these (SME) hubs at 15 industrial clusters,” he said.
In its new initiative, UCO bank this year launched the concept of ‘SME loan hub’, in which it would meet up to Rs 25 crore loan requirement of SMEs with sales of Rs 100 crore.
“Industry will not have to look for loan by visiting our various branches. They will get their loan requirement met at our exclusive SME Loan Hubs,” he said, adding that it would also relieve local branches from lending big loans to SME segment.
Opening of SME Loan hubs will also help bank to raise cheap source of funds as it intends to raise ratio of Current Account and Saving Account (Casa) in total deposits to 35 per cent in this fiscal.
“The share of Casa is pretty low at 23 per cent and we want it to raise it to level of 35 per cent this year. With opening of SME hubs, current accounts will be opened and it will also raise Casa ratio in total deposits to our targeted level,” he said.
He asserted the bank would reduce its dependence on bulk deposits by having more access to Casa accounts.
The share of SME loan along with mid corporate loan accounts for just 12 per cent of its total advances. “We want to increase the proportion of SME, retail and mid corporate to 18 per cent in next 2-3 years,” he said.
Kolkata-based UCO bank is eyeing business growth of 20 per cent this fiscal. It had total business of Rs 2.45 lakh crore in 2011-12.
Bank will also lay emphasis on reducing its NPA accounts this year which almost doubled to Rs 3,150 crore last fiscal. “Our NPA was to the tune of Rs 1,666 crore in 2009-10 which went up to Rs 3,150 crore in last fiscal mainly from manufacturing sector,” he said.