ING Vysya develops rating tool for SME lending

ING Vysya Bank has developed a scientific rating tool to assess credit worthiness of companies in the small and medium enterprises (SME) sector, which accounts for over a fifth of its loan portfolio.

The bank's chief credit officer, acting managing director and CEO, Ned Swarup said here that SMEs with an annual turnover of up to Rs 75 crore or so were not rated "that scientifically" in the past.

"So, we have developed some tools using more objective ratings that uses financial tools for management by which rating can be much more progressive," he said. "This (the new tool) will be in place definitely by middle of next year."

The SME sector contributes 22 per cent of the bank's loan portfolio which is "quite profitable". The bank plans to open branches in places where it sees scope and where it does not have "that much" presence now, Swarup said. Thirty per cent of its 430 branches in the country are located outside south India.

He said that the bank was getting ready for the Basel-II regime. "We are very progressed in terms of Basel-II implementation. If necessary, we will raise the capital," he added.

Swarup said the bank Had outpaced the industry in growth last year and was hoping to do the same this year as well. The bank's main focus is on organic growth.

"We do have a focus on SME business, agriculture and consumer finance retail business because this is growing very rapidly," he said.

"We are also focussing on housing, personal and truck loans," he added.