State Bank of India bests competitors due to loan schemes

State Bank of India's effective strategies have become the key for the bank's dominance in certain sectors.

The bank's low-priced loan schemes introduced over nine months back have propelled State Bank of India (SBI) onto the top of the growth charts in several credit segments, piping the erstwhile leaders to the post. These sectors include home, auto, small and medium enterprises (SMEs), infrastructure and education segments. In some of the project finance areas, the bank has become a global leader, according to Om Prakash Bhatt, chairman of SBI, in a report in India Today.

In the auto loan segment, SBI had gained 44 percent to Rs 11,594 crore ($2.5 billion) during the 12 months ending September 2009. During the last nine months, SBI entered into tieups with several car manufacturers and their dealers for providing auto finance.

In the home loan segment, SBI has seen an annual growth of 23 percent to Rs 62,338 crore ($13.48 billion). After launching the SBI Happy Home scheme in February 2009 with loans at 8 percent for the first year, the monthly average number of home loans sanctioned rose to 22,000 in September from 14,400 in February, the bank said.

SBI's agriculture loan sanctions grew by 21 percent, with particular thrust on warehousing taking the portfolio to Rs 58,987 crore ($12.76 billion) by September 2009.

In education loans, which are being promoted by the Centre over the last few years, SBI stood first with 42 percent growth in 12 months at Rs 8,008 crore ($1.73 billion). The shot in the arm has come from May 2009, when it brought down the rates, initially beginning at 8 percent.

Credit disbursal of SBI to SMEs was also up by 21 percent to Rs 95,907 crore ($20.75 billion). This is one of the priority areas for the Centre, for they provide the largest employment per unit of investment.