Allahabad Bank would soon convert some of its branches in south India and Odisha into specialised facilities for small and medium enterprises (SME) as part of a strategy to grow the SME loan portfolio.
Close to 25 out of the 324 branches in the region comprising southern States as well as Odisha are to be transformed into SME thrust branches over the next few months, field general manager (south) Rakesh Kumar Sharma said here on Tuesday.
Most of these branches would be in and around SME clusters in the States, such as at Balanagar in Hyderabad and at Gajuwaka in Vishkhapatnam, he said, estimating Telangana and Andhra Pradesh to get 6 or 7 such facilities.
DGM (Hyderabad zone) B.K. Sarangi added that the process had been initiated and the proposal involved deputing specialised personnel to better understand the SMEs requirements.
According to senior executives, who spoke to the press on the occasion of the 154th foundation day of Allahabad Bank, the thrust on SMEs would be complemented with an emphasis on strengthening skill sets of the bank personnel to ensure that selection of the borrowers is qualitative.
The focus on capacity building comes in the wake of gross NPAs of the bank in the region mounting to about 20% last fiscal from 17% in 2016-17.
“We are taking risk mitigation measures by improving our skills and concentrating the advances through some branches only,” Mr. Sharma said. The advances in the region totalled ₹17,000 crore in 2017-18, of which SME portfolio accounted for about ₹3,000 crore. The bank, he added, would like to raise the share of advances to SMEs from around 18% to 23%.
Retail loan is another segment in which the bank wants to grow, Mr. Sarangi said, adding demand for home, car and education loans was rising. A number of activities, including a health camp at the Himayat Nagar branch, were organised as part of the foundation day.
