BANGALORE, INDIA: The Indian Bank is one of the pioneers in financing the SME sector. It has formulated structured loan products for financing industrial clusters with finer rates of interest.

To enhance flow of credit to MSME, the bank has formed a department called Small and Medium Enterprises Development Department (SMEDD).

The focus of the SMEDD program is as follows:

   1.To primarily review the existing policy framework to provide credit to SMEs
   2.To take measures to centralise the processing of SME proposals in major centres
   3.To take over SMEs from other financial agencies or banks.

Structured loan products provided under the SMEDD scheme:

   1.IB Annapoorna and Arogya
   2.IB Ayushman
   3.IB BPO Finance
   4.IB Caterer
   5.IB Doctor plus
   6.IB My own shop
   7.IB Professional special
   8.IB Shanthi niketan
   9.IB Star rice mill
  10.IB Travel tour
  11.IB Vidya Mandir
  12.IND SME secure
  13. M. IND Vahana.

Also read: J&K govt apathetic towards SMEs

SME policy of Indian Bank:

On receipt of loan application, an acknowledgement is issued to the client immediately. The applicant is called for discussion within ten days after receipt of the application. The working capital limits recommended must be need-based and realistic, especially to new units.

The fund-based working capital limits for Micro and Small Enterprises is up to Rs. 5 crore.

The interest rate structure:

For advances upto Rs. 25 lakh, there is no credit rating and for advances above Rs. 25 lakhs, it is linked to the credit rating under Risk Assessment Model. To have an independent assessment of the risk on lending to a borrower under the SME sector, borrowers are informed through branches to get rated with SMEs Rating agency (SMERA) – the rating agency floated by the SIDBI or CRISIL.

Incentives provided to borrowers for timely repayment of loans:

   1.The installments should have been paid on or before due date
   2.There should not be any interest arrears or over dues
   3.Rebate of 0.5 per cent will be calculated only on the amount of installment promptly paid

for the period from the date of advance to the due date, whichever is earlier.

For Info on Indian Bank's SME loans visit http://www.indianbank.in/