It will also interact with dedicated industrial units to understand their needs and generate business focus. The approval of the Board of Directors is awaited, which is expected to come in a week.
Most small scale units (SSIs) in Punjab are languishing due to obsolete technology and dearth of funds for technological improvement and expansion.
The bank has mooted a proposal to have group interactions with local entrepreneurs to understand the financial needs of small and medium units and assess their merit on the basis of feedback drawn from the people in the same stream.
"This will save a lot of time and hassle in evaluating and sanctioning financial assistance. The move also creates a win-win situation for the bank and the person taking the loan," said a senior bank official.
The official added the bank has about 800 branches in the country and almost 350 branches in Punjab. The state has more than 200,000 small and medium enterprises and most of them need funding for expansion. New generation banks normally are not responsive enough to the needs of SMEs. The new vertical created by the bank would help to identify and assess the needs of local entrepreneurs and expedite fund raising for small entrepreneurs. These will serve as a tool for tracking and driving the businesses and also as single point contact for market intelligence and maintenance of liaison with industry associations and other stake holders.
A vertical, especially created for this purpose, will provide leads, review specific policies for each centre or industry so as to provide customised responses to different markets and thereby support the bank's goals.
This vertical has been introduced not only for the SME segment, but also for agriculture and personal segment businesses like agri-commodity finance, commercial dairy, horticulture, car loans, home loans, etc.
A bank official said: "What gets tracked & measured gets done." Following this concept, this vertical is being introduced in a big way in the current year .
During 2007-08, the Bank achieved an all-time high growth of over 49 per cent in its lending to the SSI (manufacturing) sector, whereas the lending to the overall SME sector (both manufacturing & service) increased by over 38 per cent.
According to the the government of India guidelines, all banks must achieve 20 per cent year-on-year growth during the 5-year period.
State Bank of Patiala has earmarked a budget of Rs 2,425 crore for 2008-09 for the SME sector accounting for 62 per cent growth for the SSI Manufacturing sector and 51 per cent growth for the overall SME segment.
The office bearers of the Chandigarh Industries Association said this initiative would definitely help them revive and expand business. "Direct communication with senior bank officials is a must to persuade bank officials of the industry's funding requirements," an office bearer said.
