UCO Bank plans to hike SSI disbursement

Kolkata-based UCO Bank is planning to give a big push to small scale industry disbursement in the region. The bank has tied with Crisil under which, the credit rating agency will assign a rating to the SSI borrowers. UCO Bank is also contemplating to revise the interest rates of existing SSI borrowers who will get themselves rated by Crisil.

The chairman and managing director of UCO Bank, V Sridar informed that it will give Rs 900-1,000 crore fresh credit to SSI sector in 2005-06. It will be 35 per cent more than the existing SSI asset of Rs 2,800 crore of the Kolkata based bank.

According to Sridar, in line with the government policy, UCO Bank has identified SSI as a thrust area for the bank and the tie up with Crisil is a step forward towards expanding the exposure to the sector.

"This will also ensure the quality of lending. For us the rating will be an additional input to objectivity and scientifically make lending decisions. It will also help the bank to determine terms like interest rates, margin and collateral requirements for SSI borrowers," he said.

UCO Bank currently have 24,700 SSI accounts. Out of which around 8,000 is in West Bengal. Incidentally, there is 30 lakh small and medium industries all over India.

Sridar pointed out that the bank will not only rate the new SSI borrowers but will also offer the facility to the existing borrowers. "We have plan to recalculate the interest rate to SSI's who will avail the rating and will get a good rating," he said.

The executive director and chief rating officer of Crisil, Roopa Kudva opined that the rating could make access to fund more easier for SSI's. "The transaction cost and time could also be minimised through this mechanism," he said.

Incidentally, Crisil launched SSI rating two months back. "We are beefing up the market intelligence mechanism for the SSI sector. Crisil has also constituted a dedicated team for this purpose," she said.

Kudva informed that Crisil has initiated discussion with other banks also for rating tie up of SSI sector. According to her, Citi Bank, Ing Vysa Bank, ICICI Bank have good SME portfolio.

"Apart from banks 50 individual SME's have approached us for rating. We have started working on 20 of them," she added.