Chennai: Indian Bank one of the largest public sector lenders in India has decided to approve micro, small and medium enterprises (MSME) projects in just 7 to 10 days and provide loans for such projects in minimum possible time. Presently Indian Bank follows a time bound process for disbursing loans for small scale industries (SSIs). Getting such loan of Rs.25,000 to 5 lakh from Indian Bank can take anywhere between 2-9 weeks in the present scenario.
Stressing the need for importance of time, while sanctioning loans for entrepreneurs, M S Sundar Rajan, CMD Indian Bank said,"It is a competitive world and today everyone works under just-in-time concept. We should look at the project and the beneficiary rather than their balance sheets. Timely sanction of funds is more important than the interest rate.” He directed the bank officials to approve loan applications from entrepreneurs in the minimum possible time and take care of their complaints or grievances within 48 hours.
Indian Bank has been able to perform so well because of its customer centric approach and M S Sundar Rajan acknowledged this fact. “I don’t want my customers to desert Indian Bank because they failed to get credit. If they do, I will punish myself by skipping lunch for a day. I am strict about it and have informed my officials in this regard," he said.
Indian Bank had set up a Common Processing Center (CPC) Chennai and it has been a great success. The CPC was used to sanction loans for MSMEs and this model will be replicated all over the country very soon.
Indian Bank has laid down the following guidelines for identification of the MSMEs
If the enterprise is engaged in manufacturing the investment in plant and machinery does not exceed twenty five lakh rupees and if the enterprise is engaged in the service sector the investment in equipment does not exceed ten lakh rupees.
If the enterprise is engaged in manufacturing the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five crore rupees and if the enterprise is engaged in the service sector the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees.
If the enterprise is engaged in manufacturing the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees and if the enterprise is engaged in the service sector the investment in equipment is more than two crore rupees but does not exceed five crore rupees.