The country’s largest lender State Bank of India on Tuesday launched a separate vertical to focus on the bottom of the pyramid borrowers in rural and semi-urban areas. In a restructuring exercise, the bank has carved out the ‘Financial Inclusion & Micro Market’ or FI&MM vertical to offer micro-credit through nearly 8,000 of its branches which have been identified pan India.

The new vertical will predominantly focus on lending to agriculture and allied activities and micro/small enterprises. It will also target financial inclusion in the hinterland areas.

“The thrust is also to improve service quality and availability of banking services through the Bank’s vast network of over 63,000 Customer Service Points in rural, semi-urban, urban & metro areas. The new Vertical will provide a boost to the micro-finance sector,” SBI said in its press release.

Rajnish Kumar, Chairman of State Bank of India said “The key elements of creating the FI&MM vertical are to bring sharper focus to different business lines and improve the quality of interaction with customers at the Branch. This is a key initiative by SBI to cater to the financial requirements of people residing in the hinterland of the country, as part of its financial inclusion journey.”

Sanjeev Nautiyal, Deputy Managing Director at State Bank of India will head the new vertical, the bank said. The FF&MM vertical will have a four-tiered structure under the Chief General Manager, General Manager, Regional Managers at Regional Business Offices (RBO) & District Sales Hub. This has been done to strengthen the credit delivery system and improve the turnaround time for quick sanctions and disbursement of small loans.

The creation of a specialised cell to target small borrowers comes amid the government’s nudge to make banks lend more to this segment. Finance Minister Nirmala Sitharaman recently said that public sector banks had sanctioned collateral-free loans worth Rs 3,200 crore through the Emergency Credit Line Guarantee Scheme in a single day on June 1. This was under the Rs 3 lakh crore MSME scheme announced by the government in its Aatma Nirbhar Bharat Abhiyan package to provide relief to COVID-19 impacted borrowers.

State Bank of India is yet to report its March quarter earnings. As of the loan book details disclosed by the bank for its third quarter, it's Small & Medium Enterprises (SME) advances stood at Rs 2,78,035 crores, forming 14.05 percent of the total book. Its agriculture advances stood at Rs 2,09,997 crores as of December 2019, forming 10.61 percent of the total advances. The bank reported Gross Non-Performing Assets (NPAs) of 9.37 percent for its SME segment and at 13.78 percent for its agriculture segment during the quarter.

First Published:Jun 2, 2020 1:39 PM IST