StanChart serenades SMEs with one-stop-shop approach

Standard Chartered Bank (SCB) has created a virtual SME (small and medium enterprises) bank by combining wholesale as well as consumer banking services at a single point.

Be it term loans, pre- or post-shipment credit, currency risk hedging or personal loans, housing loans or car loans "" everything is provided as a one-stop financial service to SME customers.

StanChart is among the clutch of banks reaping the benefits of packaging universal banking services for SMEs. Its SME exposure doubled in 2004-05 and growth in the segment has been galloping of late.

An SME customer of StanChart is no more required to run from his home branch to the trade services office of the bank if he has to open a letter of credit (LC) for imports.

"An SME's application for a letter of credit (LC) is treated with the same promptness as for a big corporate like Reliance," said the bank's head of SME banking and consumer banking, Suresh Gurumani.

"The requirement of an LC for an SME could be for as little as $50,000 against millions of dollars for big corporates. The needs of SMEs are akin to that of big corporates, but they need to be serviced like consumer banking customers," Gurumani said.

The speed at which the bank responds also matters as SMEs are growing with the World Trade Organisation (WTO) regime throwing up new business opportunities.

Recently, an SME customer of a large public sector bank shifted to StanChart as his previous banker had not responded for over 60 days to a request for an enhancement in credit limit.

Bundling of financial services by the bank also provides SMEs the convenience of banking for business and personal needs from the comfort of their offices.

StanChart's free services such as cash pick-up and delivery, cheque pick-up, demand draft delivery also adds value as SME customers save on the costs of engaging a person to perform these activities.

The average lending to SMEs by StanChart is in the range of Rs 2 crore to Rs 3 crore, with the highest being Rs 15 crore.

Gurumani said the bank is witnessing faster growth in its SME business also because of the goodwill it earns from existing customers.

"Our regional managers for SME banking are available on mobile phones even at 9 pm. We even provide free advice and assistance if an exporter wants to set up an office overseas through the StanChart offices there," he said.