A recent press report said that Union Bank has framed mid – corporate banking vertical from micro, small and medium enterprises (MSME) banking vertical. This plan has been implemented by focusing on the credit requirements of companies with a turnover ranging from 100 – 500 crore.
The bank has carried out restructuring last month and this resulted in a transfer of loans amounting to Rs. 15,000 crore to the newly created mid-corporate segment from MSME segment or line of business.
The MSME vertical of Union bank which is a private sector bank now deals with loan offers for companies with turnover of Rs.100 crore. The loan portfolios of the MSME line of business after inter – vertical transfer of loans is about Rs. 45,000 crore. The bank has appointed Mr.S.K.Sangar, General Manager, as the Head of mid – corporate banking.
Across the country around 20 large branches would be allocated as the mid – corporate branches. This plan of lending loans to mid – corporate has gained momentum because they make good return of about 12 – 13 per cent.
On the other hand, large companies wanted loans either at a benchmark lending rate of the bank which is prevailing around 10.75 per cent or at the minimum spread over this rate.
The bank’s large corporate has also undergone restructuring and last year this department was divided into two segments namely origination and sanction each headed by a general manger which was again merged now. The large corporate vertical deals with loan proposals for companies with Rs.500 crore as turnover.