Tag: cluster approach

Top public sector lender State Bank of India says its Chennai Circle is one of the important business regions with its leadership in advances, and agri gold loans. R Radhakrishnan, who took charge as the Chief General Manager (CGM) of State Bank of India (SBI), Chennai Circle in June this year spoke to BusinessLine about the circle’s growth areas and expansion plans. Excerpts

How was the September 2021 quarter for Chennai Circle?

Chennai Circle’s performance was fairly good in Q2FY22. In terms of growth in deposits and advances, we have achieved 47% of our annual budget in deposits and 13% of our annual budget in advances.

Have collection efficiencies across segments reached pre-Covid levels in this region?

There has been significant reduction in slippages during Q2FY22 vis-à-vis Q1FY22. The slippages decreased by 73%. The NPA percentage has also improved from 2.91% as on June 30, 2021 to 2.25% as on September 30, 2021 which is below pre-Covid level. Collection efficiency in the SME sector has not yet reached pre-Covid level. Though all out efforts are being taken to revive units through restructuring and Covid related supports, SME units are struggling to recover from the losses incurred due to lock down, cancellation of orders and migration of labour.

You are a big player in the MSME segment and TN is also known for MSMEs. How big is the MSME portfolio and how has it grown in the past few years ?

Presently the Circle is having an SME Portfolio of ₹21,000 crore excluding our large & mid corporate portfolio of ₹58,061 crore. In total, we are having exposure of ₹80,000 crore in SME. Our MSME portfolio stands at ₹14,462 crore. We have exposure to manufacturing and retail trade in various sectors such as textiles, heavy commercial vehicles, auto components, automobiles, leather, fabrication, cement, sugar, paper, IT related services and safety matches.

The Tamil Nadu government recently announced MSME Policy 2021 and set a target to attract ₹2 trillion in new investments in the MSME sector by 2025 and achieve an annual growth of 15% in the manufacturing sector. We have also planned to increase our MSME portfolio by ₹3,756 crore by the end of March 2022. We are adopting a cluster approach to grow in each segment of the MSME spectrum. We have also launched Sanjeevani & Aarogya MSME loan products targeting the health sector.

What are some of the major growth areas for this circle?

The Circle has a total business portfolio of ₹3.08 trillion with ₹1.83 trillion in deposits and ₹1.25 trillion in advances. Its portfolio is almost equally distributed in SME, agri and retail segments. Home loan segment contributes to 38% of total advances. Some of the major growth areas for this Circle are retail loans, housing loans, gold loans, SHGs and MSME Loans.

How does Chennai circle compare with other zones of SBI?

Chennai Circle consists of 1,247 branches spread over the geographical area of Tamil Nadu & Pondicherry. Our branch share is 10.60%. Our deposit share is 18.20 % and advances share is 17.50 % among all the banks in this zone. We have a network of 5,348 ATM/ADWMs with a market share of 19%. Chennai Circle stands pan-India No.1 in aggregate advances & agri gold loans. It has the third highest portfolio in housing loans.

What are your business targets for this fiscal and how are you planning to achieve the same?

For FY 2021-22, we have planned to grow ₹10,386 crore in CASA deposits and ₹19,433 crore in total deposits. We have planned to grow our aggregate advances portfolio by ₹19,138 crore.

Could you also provide details on the branch expansion/ rationalisation plans?

Last financial year, we opened 22 branches including 10 SME branches. As on date, we have 2,742 Customer Service Points (CSPs) in Chennai Circle apart from 1,247 branches. We are planning to open 700 CSPs during this fiscal and 3 more branches to extend our services in unbanked areas.