In a first for a public sector lender, Syndicate Bank plans to set up a platform for loan approval within 15 minutes. Top officials of the bank said that loans up to Rs. 5 crore for housing, retail, and MSME segments can be applied online using the platform and will be approved within 15 minutes.
“In this quarter, we are planning to launch a system of giving in-principle approval for loans of up to Rs. 5 crore within 15 minutes for housing, retail, and MSME segments. After the government’s push for 59-minute loan approval for MSMEs, this will be our first offering by any public sector bank,” said Ajay Kumar Khurana, Executive Director, Syndicate Bank.
“The software is being readied and will be launched before the end of this fiscal. This 15-minute loan platform will not be available for agri loans and corporate loans,” said Khurana.
In spite of the several concerns being raised about the success of Mudra loans, Syndicate Bank has set a target of lending Rs. 10,000 crore to MSMEs in the next two months.
Mudra loan accounts
The bank has 4.5 lakh Mudra loan accounts with advances of Rs. 7,100 crore.
The Gross NPA in these accounts is about 10 per cent. This is, however, lower than the Gross NPA of the bank at 12.98 per cent as on September 2018.
Of the total Gross NPAs of Rs. 27,000 crore, the share of the corporate segment is about Rs. 14,000 crore.
Khurana stated that so far Rs. 1,000 crore from two large accounts has been recovered following the resolution process under the NCLT. However, Rs. 1,500 crore more is to be recovered from three large accounts, including Essar Steel and Bhushan Power.
The bank recently launched the Stressed Assets Management (SAM) vertical with a dedicated team of 1,200 employees, focussing on recovery of NPAs.
The vertical will comprise legal and credit experts who will help out branch managers recover dues.
The members of SAM have been given training on Insolvency and Bankruptcy Code (IBC) and in the functioning of the National Company Law Tribunal (NCLT).