With top corporates demanding low rates on loans and margins nowadays being wafer-thin, new generation UTI Bank is planning to diversify its business. They are cautiously making an attempt to dispense credit to the small-scale and agricultural sectors.
Another recent entrant in the small- and medium-size enterprises (SMEs) business is the HDFC Bank through supply chain financing with a portfolio of over Rs 2,000 crore. Traditionally, most foreign and private sector banks have stayed away from the SME segment due to the high-level of non-performing loans (NPAs) in the sector.
UTI Bank plans to conduct a detailed research study before venturing into this high-risk market, said a senior official from the bank. The bank is planning to study in-depth the two towns of Sivakasi and Ludhiana to start with, in order to understand the SME business rooted there.
