Financial Daily from THE HINDU group of publications
Wednesday, Jul 06, 2005
Money & Banking
Industry & Economy - SSI
Yes Bank, SIDBI tie up to offer loans to SMEs
Mr Rana Kapoor (left), Managing Director & CEO, Yes Bank, and Mr N. Balasubramanian, Chairman & Managing Director, SIDBI, at a press conference in Mumbai on Tuesday - Paul Noronha
Mumbai , July 5
SMALL Industries Development Bank of India and Yes Bank announced a tie-up today to provide credit and other financial products to the small and medium enterprises sector, under a new co-brand called Yes SIDBI.
The banks are looking at a target of Rs 100-crore worth incremental loans to the SME sector in one year.
Mr N. Balasubramanian, Chairman and Managing Director, SIDBI, said, "This tie-up is different from other tie-ups because Yes Bank has special skills in derivative products and technology, which SIDBI lacks. Bundling of products is the global concept and we want to offer that to the SME sector."
This is the first tie-up between SIDBI and a private bank. So far, the development bank has tied up with public sector banks such as Bank of India and UCO Bank.
About what Yes Bank would gain from the tie-up, Mr Rana Kapoor, Managing Director and CEO, Yes Bank, said, "With this tie-up, we will accelerate our focus on the SME sector." Yes Bank's exposure to the emerging corporate entities and the SME sector was around Rs 350 crore, Mr Kapoor said.
The pilot project for Yes SIDBI will begin in Gurgaon and focus on clusters such as auto, garment and IT-enabled services.
SIDBI has tied up the entire corpus of the Rs 500-crore SME Growth Fund, which is a venture capital fund. Around Rs 40-50 crore has been disbursed in sectors such as auto components, pharma, infrastructure and manufacturing, he added.
Out of the Rs 10,000-crore SME Fund, which was set up in April 2004, the credit offtake has been around Rs 2,800 crore till March 31, 2005, Mr Balasubramanian said.
The proposed credit rating agency to be launched jointly by SIDBI and Dun and Bradstreet and the limited liability company to provide risk-sharing facility in a tie-up with Seco, a Swiss agency, are likely to be ready by August, he added.
Yes Bank, whose net worth has touched approximately Rs 525 crore, post-IPO, has started retail banking in a small way by offering mutual funds and insurance products, Mr Kapoor said.
The bank also hopes to start personal loans in another two to three months and housing loans later, he added.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line