Chennai, May 29 (IANS) India's largest government-owned lender, State Bank of India (SBI) plans to reduce its lending rates for small and medium enterprises (SMEs) from June onwards so as to win them back to its fold, said its chairman Tuesday.
Speaking to reporters here, SBI chairman Pratip Chaudhuri said: "The bank's current lending rates for the SME sector ranges between 12-17 percent. This will be brought down to 10.5 percent to 15.3 percent."
He was here to donate an ambulance van and medical equipments on behalf to SBI's Chennai Circle to the Paediatric Centre of Cancer Institute here.
According to SBI deputy managing director Sharad Sharma, the reduction in interest rates is expected to bring back the SME customers the bank had lost due to high lending rates.
Lending to SME accounts for around 14 percent of the bank's total advances of Rs.80,000 crore.
According to Chaudhuri, SBI is hoping to bring down its net non performing assets (NPA) to 1.62 percent this fiscal from 1.8 percent and a separate Stressed Asset Management Group has been formed to focuss on stressed loans and recover them.
He said SBI is also asking its borrowers to look at restructuring of their loans before any default while planning to approach Moody's to review the bank's rating as its capital base has been strengthened.
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